More reports on: Government policies

No move to allow FDI in online retail trading: Nirmala Sitaraman

news
15 May 2015

The government's stand on foreign direct investment (FDI) in online multi-brand retail trade remains unchanged although it has been interpreted so by some following the release of the new consolidated FDI policy by the industry department, commerce and industry minister Nirmala Sitharaman said.

''Nothing has changed,'' she told reporters after a round of consultations with stakeholders on Thursday.

The government has kicked off consultations on the FDI policy on e-commerce with companies such as Flipkart and eBay to debate the pros and cons of allowing foreign investment in online retail and discuss industry concerns related to taxation as well as definitions.

On the brick-and-mortar model multi-brand retail trade, the government maintained that the FDI policy remained what the BJP manifesto said. The BJP has favoured FDI in all employment generating sectors except multi-brand retail.

However, the consolidated FDI policy issued recently by the industry department retained the previous UPA government's decision to allow 51 per cent foreign investment in the sector.

Separately, finance minister Arun Jaitley, reiterated the party position on FDI in multi-brand retail. ''…as far as I have told you that political stance of the party in power is concerned, everybody knows we were not in favour. Now the question is what do you do with the past and that is the only question that remained and that debate is not a secret debate,'' Jaitley said.

Following the stakeholders consultation on e-commerce, Sitharaman said the government is yet to take a stand on allowing FDI in e-retail. ''We have heard everybody. Positions on whether they need FDI or do not need FDI and whether it will affect level playing field have been explained. However, we need many more meetings,'' she said.

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 stakeholder meeting on e-commerce was attended by representatives from industry bodies CII, FICCI, Nasscom and companies such as eBay, Snapdeal, Decathlon, H&M and Ikea.





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