E-commerce companies urge govt to maintain FDI policy

The companies discussed FDI’s trade policy with the Department of Industrial Development and Internal Trade (DPIIT) at a meeting on Thursday.

Representatives of at least a dozen companies, including Amazon, Flipkart, Reliance, Snapdeal, Paytm, Tata Cliq, Grofers and Pepperfry, attended the meeting. Pepperfry said any change in policy could have an impact on investor sentiment. Already, the second wave of Covid-19 may prevent investors from becoming violent in funding, the source said.

“Companies like Paytm and Tata Cliq, on the other hand, keep the atmosphere neutral. They said the policy should be fair and transparent to all. Surprisingly, there was no discussion about downtime, ”said the source.

All companies are now expected to make one submission to the department within a week.

Amazon India said in a statement, “We welcome DPIIT’s industrial consultation process and the opportunity for constructive and ongoing dialogue with government. FDI policy requires stability and predictability of investors as any business disruption will affect millions of livelihoods and services, with negative consequences for subcontractors and service providers. MSMEs, startups and offline stores that are not yet barely available in Covid-19. ”

Companies such as Amazon and Flipkart-controlled Walmart, which often face scrutiny by Indian regulators for their alleged business practices, spend billions of dollars to expand their operations, establish infrastructure and train small and medium enterprises.

Last week, DPIIT launched a stakeholder consultation on FDI rules in e-commerce. The Confederation of All India Traders, representing the department, said that although the government had made it clear in various media reports that foreign e-commerce players could only work in marketplaces, large companies continued to use the e-commerce model based on direct and indirect control over merchant property. .

The government is said to be scrutinizing the interpretation of FDI rules. Earlier media reports suggested that the government could tighten the policy, directing companies to restructure their existing advertising systems.

In December 2018, the government reviewed FDI’s policies, which prohibit online retail outlets from selling corporate products where they hold or control inventory inventory. Companies are also prohibited from inserting ink into specialized marketing programs that may affect product prices. These rules state that a seller’s calculation will be considered to be regulated by the e-commerce market if more than 25% of the seller’s purchases come from the market business or his company’s companies.

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