Govt to soon issue ‘clarification’ on FDI in e-commerce: Piyush Goyal

The Department for Promotion of Industry Internal Trade (DPIIT) will soon issue a ‘clarification’ on foreign direct investment (FDI) in e-commerce, amid complaints from some segments of the industry that some e-commerce behemoths have been flouting the policy rolled out by the government.

“The FDI policy has been crystal clear ever since it first came up, but certain instances have come to our notice that the policy is not being followed in letter spirit. We will be clarifying that very shortly,” commerce industry minister said in a virtual briefing. The minister added that the FDI policy, however, will not be amended.

The development comes in the backdrop of domestic traders’ body over the last few years crying foul urging the government to take action against e-commerce giants such as Amazon, Flipkart, alleging that they have been flouting the FDI policy norms by promoting preferential sellers, influencing product prices, following various anti-competitive practices.

In December 2018, DPIIT had also issued a clarification via a ‘Press Note’ comprising FDI guidelines in the past, tightening norms for online retailers for better enforcement of these rules. However, offline traders claim that these companies have still managed to circumvent the local laws.

In the past, DPIIT had also issued clarifications via a ‘Press Note’ comprising FDI guidelines, to tighten norms for etailers for better enforcement of foreign investment rules. However, offline traders claim that these companies have still managed to circumvent the local laws.

When asked about the timeline for the announcement of the much awaited e-commerce policy, Goyal said that the government has recently announced e-Commerce rules under the consumer protection act. “This is a series which involves consumer affairs, FDI policy e-commerce policy,” he said.

“We believe that our most important stakeholder is the consumer we wanted to make sure that consumer protection prevails over everything else. By announcing the e-commerce policy for consumer protection, we have demonstrated that our first foremost concern is the consumer, 1.3 billion Indians are our first foremost priority,” Goyal said.

The consumer affairs ministry had last month proposed slew of changes in the consumer protection rules to protect the interests of consumers also make e-commerce companies more accountable responsible. The rules have created quite a stir among companies, with some even anticipating a change in their business structure if the rules were to be implemented.

The consumer affairs ministry has sought comments from relevant stakeholders by July 6.

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