With all the debate going on around the FDI in retail, the newest topic for debate is the FDI in E-Commerce. India's Foreign Direct Investment (FDI) policy restricts e-commerce companies from offering services directly to retail consumers. At present, 100 percent FDI is allowed in business -to-business (B2B) e-commerce but not in retail trading.
Global retail giant Amazon.com is 'engaging' with the government for relaxing of foreign investment norms in the e-commerce space, following which it will adopt a hybrid model to start product retailing. The Indian IT-ITes industry body Nasscom favours FDI in ecommerce in the retail sector, but wants the government to make some amount of local sourcing mandatory. Several global retailers have already raised their concerns over the sourcing norm. As per the foreign direct investment policy for multi-brand retail trading, at least 30 per cent of the value of procurement of manufactured/processed products shall be sourced from Indian 'small industries'.
Whether the FDI in E-commerce would be beneficial or not remains to seen, but it is going to be a long and tiring debate.
Thanks and Regards,
Vaisakh Krishnan
12DM-155
Section B
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