Legal framework, consumer protection must for FDI in e-commerce, say states
Expressing concern over legal and tax related issues related to e-commerce, state governments said that small retailers and consumers must be protected before allowing 100% foreign direct investment (FDI) in the sector. Union Minister of State for Commerce and Industry Nirmala Sitharaman met trade ministers of all the states on Wednesday to discuss the matter. The Union Minister said that the government will decide on allowing 100% FDI in e-commerce after proper consultation with all stake holders. The minister asked state governments to give their views on the matter in two weeks. At Wednesday's meeting, Chhattisgarh Commerce and Industry Minister Amar Agrawal said that the country must have a comprehensive law to deal with issues related to e-commerce, including online retails. “At present, e-commerce industry is governed by IT Act, 2000 and there is no specific law for the sector. Even tax rates are not same in all states. Keeping in mind the fast growth of e-commerce, there is an urgent need for legal framework as this could lead to legal obstacles in the future,” Agrawal said. On allowing foreign players in online retail business, he said that robust global and domestic supply rules as well as FDI norms should be followed and rights of consumers must be protected. Similarly, Haryana's Finance and Industry Minister Captain Abhimanyu also stressed on the “interest of consumers, small retailers as well as SMEs” before allowing FDI in e-commerce. Punjab Commerce Minister Madan Mohan Mittal also said the state is open to e-commerce in FDI but with a condition that it should benefit consumers and domestic shopkeepers. At present, 100% FDI is allowed only in single brand retail and in business to business (B2B) segment. Domestic traders fear that unrestricted entry of foreign players in multi-brand online retail will enable them to skip the offline trade rules and give competitive edge against small retailers within the country. “Indian shopkeepers will not be able to compete with international players because of uneven level playing field. Imported goods will be dumped in the Indian markets, which will pose a major challenge for small manufacturers,” Praveen Khandelwal, Secretary General of the Confederation of All India Traders (CAIT), had said in an earlier interaction with The Dollar Business.
July 16, 2015 | 5:14 pm IST.
to success.