Under new FDI (Foreign Direct Investment) regulations, retail giants such as Wal-Mart, Carrefour , Amazon and Tesco, long barred from selling directly to Indian consumers will be permitted to own a majority 51% stake in joint operations with a local partner. At the same time it is eagerly awaited by national players in e- commerce in India to witness an indirect impact on the e –commerce business.
eBay country head for India Muralikrishnan B, who took over the reins of the eBay portfolio in India, Philippines and Malaysia in May 2011 told Techcircle that Internet firms are waiting for clarification from the government on what the new policy means and its impact for online retailing. Muralikrishnan B
“At the outset, everyone has been waiting for FDI in multi-brand retail for a long while. For those of us in the industry, the first question we asked when we heard of new FDI modification on multi-brand retail was how it would impact us. But it was silent on implications on e-commerce”, according to Muralikrishnan.
However, Commerce and Industry Minister Anand Sharma expects fresh investment to generate 10 million new jobs over three years, about five to six million of them in logistics alone. On the question of FDI impact he said that the government will look into the online retail business, without giving any details as to how the FDI norms will impact e-tailing in India and whether the new norms are relevant to e-commerce.
Muralikrishnan emphasized that the government should spend time examining e-commerce. “This shows the fact that the government has not recognised the growing presence of e-commerce in India. It is still a grey area. But they have now taken cognizance of this fact and they will include e-commerce, which is the right move” added Muralikrishnan.