FDI policy on e-commerce should protect the interests of 8 cr small merchants

4/5/2021

For any News Coverage, Please Contact: media@jhalak.com

 The PHD Chamber of Commerce and Industry has come out with a list of suggestions to be included in the FDI policy on e-commerce to protect the interest of 8 crore small merchants and the livelihood of 30 crore people dependent on them.

The Chamber has suggested that the foreign companies who are allowed to setup up only e-commerce marketplace platform should not have any direct or indirect control over the inventories.

Therefore, the definition of group companies should be extended to include companies operating the marketplace platform itself, its group companies, its affiliates companies, its associated enterprises, its related parties, and any other person(s) controlled, directly or indirectly, by above or in which the person(s) in the companies mentioned above have any direct or indirect equity or economic participation in any manner.

The Chamber recommends that the e-commerce marketplace entity having FDI should not be allowed to control inventory, directly or indirectly, as it tantamount to prohibited multi-brand retailing by foreign companies. Therefore, the definition of marketplace based e-commerce and inventory-based model of e-commerce should be defined as an information technology platform by an e­ commerce entity on a digital and electronic network to act as a facilitator between buyer and seller.

The Chamber said that an inventory-based model of e-commerce should mean an e-commerce activity where the inventory of any of the goods or services sold on the e-commerce platform is directly or indirectly owned or controlled by the e-commerce entity and is sold to the consumers directly. If any goods or services which are sold by the group companies are resold in the e-commerce platform, then such activity shall also be treated as inventory based model of e-commerce.

It said the permission to enter the B2B agreement should be clarified that the e-Commerce marketplace entity and its group companies cannot sell those inventories that are purported to be sold by them on its marketplace.

Further, there should be a threshold limit of buying from domestic producers and the armed pricing to be followed with respect to the domestic players.

It is required to integrate the online marketplaces with the offline markets and ensure that they coexist peacefully with enough opportunities for domestic and international players in India's booming retail e-commerce industry.

The chamber added that e-commerce platforms have a revenue stream through advertising and vendors with deeper pockets are able to exploit smaller vendors for front-page placement.

While the algorithm for e-commerce platforms is proprietary, it allows for "preferred vendors" to gain top ranks on the front page.

If there is a possibility to regulate the "advertising norms" to allow preferential treatment for small local vendors, it would level the playing field to some extent.

Source: IANS

For any News Coverage,Please Contact: media@jhalak.com

Related Links

Jhalak.com - Indian Classifieds in USA.

  • Jhalak.com is an Enterprise Multi Utility Classifieds Portal Which is Integrated and Centralized Online Classifieds, Sports Software’s and Indian Movie tickets.
  • Jhalak.com is an Indian Classifieds in USA that Covers Indian Business Directory, Roommates, Nanny Services, Buy and Sell, Indian Attorneys, CPA and Financial Tax Services, Indian Doctors, Indian Events, Indian Stores, Shops, H1 B Jobs, Training Centers, Indian Restaurants, Indian Communities, Coupons, Indian Real Estate agents and Many more desi classifieds categories.
  • Our Entertainment zone is a set of Indian Movies Information include Tollywood, Bollywood, Kollywood, Sandalwood, Hollywood and Provides Online Movies Tickets for Indian Movies in USA.
  • Online Sports Software: Cricket, Volley-Ball, Tennis, Badminton, Carrom and Ping Pong and Chess.