Online retailers such as Amazon, Walmart, might soon get a big sigh of relief from the hard norms and policies being followed in India when it comes to FDI in e commerce in the country. After a lot of attempts made by various organisations, PMO has now turned its favour in opening up e-retail sector to FDI (Foreign Direct Investment).
As per reports, the National Security Adviser Shivshankar Menon, has advised that FDI provisions for multi-brand retail stores should be extended to e-commerce. In last September, the government had allowed 51 per cent FDI in multi-brand retail stores but restricted it for the e-commerce.
For now, NSA is preparing an agenda for Prime Minister Manmohan Singh’s meeting with US President Barack Obama on September 27th and are looking forward to sort out the issue before the visit. Whereas, Department of Industrial Policy and Promotion (DIPP) will be examining the feasibility and implications of allowing FDI in e-commerce and respond accordingly to the NSA proposal.
“The US wants India to open up its retail segment, including e-commerce further and also tighten its intellectual property regime,” said a Commerce Department official.
Previously a number of different organisations and prominent people have presented their favour for opening up FDI for online retail in the country.
In February, The US India Business Council presented a memorandum while asking the government to remove the current restrictions in the Foreign Direct sales to consumers by e-commerce and also to allow foreign companies to acquire direct ownership in real estate for investment.
Later in March, Planning Commission deputy chairman Montek Singh Ahluwalia said that as the government has allowed FDI in conventional retail, so there is no reason for barring it for online retail, as online retail is just the oversight of it.
Amazon has also sent its top brass to India to suggest for the policy change, to ensure its entry in India. Prior to that, in January, Assocham also asked government to remove FDI ban from e-commerce.
In India, the government already allowed up to 100% FDI in B2B e-commerce in 2006, while restricting FDI in multi-brand retailing. The present FDI norms announced in September last year for retail sector has blocked foreign investments in e-commerce and allowed up to 51% FDI in multi-brand retail stores and 100% FDI in single-brand retail.
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