India: to be, or not to be FDI in ecommerce legally relaxed?

The industry body claims that retail is a business that should be classified on the basis of category of goods and services provided and not on the basis of channels like brick-and-mortar stores or ecommerce, infotechlead.com reports. RAI is pushing for a level playing field in respect to FDI among different retail formats, said Kumar Rajagopalan, CEO, Retailers Association of India.

He added that it is the body`s preoccupation to oversee the treatment meted out by the Government of India to the two players in the same market which, presently, is inequitable. As such, the double standard of the Indian government in allowing ecommerce with foreign investment in India while not allowing multi brand retail in the physical world is considered as discrimination, the source cites.

The retail body did not participate in the stakeholders consultation meeting on FDI policy on ecommerce sector called by DIPP. Meanwhile, the National Association of Software and Services Companies (NASSCOM) participated in the stakeholder meeting chaired by commerce and industry minister Nirmala Sitharaman.

NASSCOM stated that the FDI policy should address diverse needs of entrepreneurs and investors supporting both scaling up of operations and entrepreneurship ideas and, therefore, the need for 100% foreign investments in B2C ecommerce.

The current policy recognises the need for FDI investment in a limited portion of the ecommerce value chain which is the B2B ecommerce. According to NASSCOM, it is imperative that entrepreneurs, who have already made significant investments and are looking ahead to growth and market share, should be allowed to seek investments to support business operations.

The government should work towards creating conditions that motivates ecommerce start-ups and investors, and not bog them down with regulatory conditions and unviable restrictions, NASSCOM said. With NASSCOM supporting government’s move, RAI will have to now garner industry support to push for their demands.

Ecommerce translates the physical world into the internet world and therefore deserves to be similarly regulated as commerce in the physical world. Due to the advent of technology, the laws which regulate the physical world deserve to be declared archaic and disregarded otherwise it would allow an undue advantage to an ecommerce player at the cost of the physical sector, RAI said, the source cites.