A section of e-commerce corporations has urged the government to sustain stability in policy, emphasising that their firms have been structured in line with the existing regulations, a supply conscious of the discussions has stated.
The corporations discussed FDI policy in e-commerce with the division for promotion of market & internal trade (DPIIT) in a meeting on Thursday.
Representatives of at least a dozen corporations, such as Amazon, Flipkart, Reliance, Snapdeal, Paytm, Tata Cliq, Grofers and Pepperfry, attended the meeting. Pepperfry stated any alter in policy is most likely to weigh on investor sentiment. Already, a second Covid-19 wave may well deter investors from going aggressive on funding, it stated, as per the supply.
“Companies like Paytm and Tata Cliq on the other hand maintained a neutral tone. They said the policy should be fair and transparent for all. Surprisingly, a discussion did not take place on discounting practices,” the supply stated.
All the corporations are now anticipated to hand in person submissions to the division in a week’s time.
Amazon India stated in a statement, “We welcome the DPIIT initiative for consultations with industry and the opportunity for a constructive and continuing dialogue with the government. The FDI policy needs to be stable and predictable for investor confidence as any disruption in business will impact millions of livelihoods and jobs, have negative consequences on downstream suppliers and service providers including MSMEs, start-ups and offline stores which have barely recovered from the setback of Covid-19.”
Companies like Amazon and Walmart-controlled Flipkart, which have frequently faced Indian regulators’ scrutiny for their allegedly discriminatory small business practices, are spending billions of dollars to expand their operations, set up infrastructure and train tiny and medium firms.
Last week, the DPIIT had initiated a consultation with stakeholders on the FDI guidelines in e-commerce. The Confederation of All India Traders, in its representation to the division, stated that despite the fact that the government has clarified by way of different press notes that foreign e-commerce players can operate only by way of marketplace platforms, substantial corporations have continued to resort to prohibited inventory-based model of e-commerce by direct and indirect manage more than the sellers’ inventory.
The government is stated to be mulling issuing a clarification on FDI guidelines. Media reports earlier indicated that the government could tighten the policy, directing corporations to restructure their current advertising tie-ups.
In December 2018, the government had revised FDI norms, barring on line marketplaces from promoting merchandise of corporations in which they hold stakes or manage the inventory. Companies had been also banned from inking exclusive advertising arrangements that could influence solution costs. The guidelines stated the inventory of a vendor would be deemed to be controlled by e-commerce marketplace if more than 25% of purchases of the vendor are from the marketplace entity or its group corporations.