Government to come out with 'detailed clarification' on e-commerce

The Commerce and Industry Ministry will come out with "detailed clarifications" on all aspects related to the e-commerce space after holding wide consultations with various states and other stakeholders.

With this aim, the Department of Industrial Policy and Promotion (DIPP) on Friday held a series of meetings with seven Central government departments, bankers and industry players.

The Commerce and Industry Ministry will come out with "detailed clarifications" on all aspects related to the e-commerce space.

"This was all the preparatory meeting for the July 15 meeting with states. Commerce and Industry Minister Nirmala Sitharaman will chair that. After that, the ministry will come out with a detailed clarification on issues in e-commerce like its definition, tax related rules, definition of market-place model," sources said.

However, they did not give any timeline as when the government will come out with the clarification.

DIPP Secretary Amitabh Kant held three meetings during the day to take views of various stakeholders on how to tackle several issues facing the e-commerce sector including foreign direct investment (FDI) in the segment.

Kant first met officials of various public sector banks on issues over payment mechanism of e-commerce.

In another meeting, he met representatives of commerce, finance, corporate affairs and consumer affairs ministries to take their views on the matter. He also held consultations with representatives of retail companies and industry associations to take their views on the matter.

These included representatives from both domestic and foreign retailers and e-commerce companies such Amazon, Future Retail, Flipkart, Walmart, H&M, Snapdeal, attended the
meeting.

Retailers Association of India (RAI), which had dragged the government to courts over the selective FDI in the sector, said the issue is not of brick and mortar versus e-commerce.

It is about who is allowed to bring in funds and who isn't.

"We have asked the government to define retail. There should not be two policies, one for e-commerce and one for retail," RAI chief executive Kumar Rajagopal, who attended the meeting, told PTI.

Making his point, Rajagopal said: "Fact of the case is somebody who claims to be a retailer does not get funds. Why is Amazon, a global retailer, calls itself a marketplace here and not a retailer?"

Agreeing with him, Future Retail Joint Managing Director Rakesh Biyani said: "There is a need to define comprehensive policy on retail. We expect government to simplify rules in what constitutes retail. Government has to decide on permitting FDI in all forms of retail trade."

Industry body CII chairman Viresh Oberoi, however, said: "What is required is to spread awareness and benefits (of e-commerce) rather than bring in regulations to control."

CAIT National Secretary General Praveen Khandelwal said if FDI in e-commerce is allowed, "it will facilitate mass scale dumping of products from over the globe to India".

Currently, the government allows 100 per cent FDI in business to business e-commerce and not to business to consumers.