Govt bats for 50 percent foreign investment in e-commerce

The government might allow 50 per cent foreign direct investment (FDI) in e-commerce retail trading.

In a discussion paper circulated on 7 January by the Department of Industrial Policy and Promotion (DIPP) under the Ministry of Commerce and Industry, the government has sought viewpoints from all stakeholders in permitting FDI in the business-to-consumer (B2C) sector.

In the paper, the government has sought comments on whether 50 per cent FDI in e-commerce should be allowed without any prior approval from the government. It has also asked whether FDI in e-commerce should encompass goods, services and intellectual property.

Apparently, while global players such as Amazon, eBay have been pushing the government to take the move, domestic players like Flipkart.com are opposed to the idea. While there are some like HomeShop18, OLX, Quickr and Snapdeal who want the decision to go through. Besides, retail giant WalMart has been planning to enter India with its e-commerce business, sources told Business Standard.

Even if it allows FDI, the government may put in a mandatory 40 per cent sourcing clause from small and medium enterprises, something that could put off foreign players.

Source: http://cablequest.org/news/government-news/item/3991-govt-bats-for-50-percent-foreign-investment-in-e-commerce.htmlSource: http://cablequest.org/news/government-news/item/3991-govt-bats-for-50-percent-foreign-investment-in-e-commerce.html