Tuesday 7 July 2015

FDI in e-comm: Centre to hold talks with all stakeholders, again AMITI SEN

With pressure mounting on India from potential free-trade partner countries to open up the e-commerce sector, the Commerce Ministry has called for fresh round of stakeholder consultations with industry representatives, both from e-commerce and brick-and-mortar retail companies, on the issue.
Commerce and Industry Minister Nirmala Sitharaman will meet the industry, including representatives from industry bodies CII and FICCI, on July 10 to discuss the pros and cons of opening up the sector to foreign players and the safeguards that might be required if foreign direct investment (FDI) is allowed, a DIPP official said. Both Indian and foreign e-commerce companies such as Flipkart, eBay, Snapdeal and Amazon are likely to attend the meeting. Organisations representing traders and retailers have also been asked to attend.
“We have called almost everybody who has a stake in the issue. We want a fair discussion,” the official said.
The first round of consultations in May was inconclusive as traders’ organisations like the Confederation of All India Traders had opposed the move, while the Retailers Association of India representing large brick-and-mortar retail companies had boycotted the meeting.
Sitharaman is also scheduled to meet chief ministers on July 15 to get their views on the matter.
At present, India allows 100 per cent FDI in business-to-business or B2B e-commerce, but not in business-to-consumer or B2C companies that sell directly to consumers. The country allows 51 per cent FDI in brick-and-mortar retail.
New Delhi is finding itself under increased pressure to take on commitments to open up the entire e-commerce sector to foreign investment in the various free trade pacts it is negotiating with different countries.
For instance, in the on-going regional comprehensive economic partnership (RCEP) negotiations that it is working at with the ten-member Asean, Japan, South Korea, China, New Zealand and Australia, almost all members are in favour of including e-commerce in the deal.
Australia also wants e-commerce in the bilateral FTA it is negotiating with India, while Russia wants rules on e-commerce within BRICS (Brazil, Russia, India, China, South Africa) and its proposed FTA with India.
“India is facing demands at various global platforms for opening up of the e-commerce sector. It is becoming difficult to say no,” the official said.

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