The contemporary rules regarding FDI in Retail Ecommerce has certain limitations in the current situations. According to the existing standards, any e-commerce concern that is involved in business to business trade, for instance bulk good or marketing materials to businesses or organizations are allowed to drill 100 percent percent FDI in their company. However, the same is not applied in case of B2C e-commerce.
As per the experts, the permission to have 100 per cent FDI in B2C e-commerce part will strengthen the back-end infrastructure of companies, and that in turn also ensures job opportunities for millions. Employment in customer care, IT modified services, warehousing, administration could evolve as the probable fields of jobs in the e-commerce. In addition, consumers will also have maximum choices still in the farthest locations of the country.
World’s largest e-commerce firm Amazon.com is taking an endeavor to implement a hybrid model for product retailing in the country. According to a present report by PTI, Amazon is also trying to engage with the government for relaxing the current foreign direct investment rules in the retail e-commerce space in India. Presently, FDI in India the multi-brand e-commerce is banned, however, marketplaces do not face a ban on FDI, as they provide platform for other sellers’ in order to sell to the consumers with the marketplace, just being a facilitator.
Almost a year ago, when Indian government opened gateway for foreign investors by permitting up to 51 percent FDI in multi-brand retail, it clearly excluded the e-commerce firms. Besides, Indian government is also not re-looking on the ban in the Indian e-commerce space as long as FDI is concerned. The denial of 100 per cent FDI in the retail multi-brand e-commerce has thrown a huge challenge for the Indian e-commerce companies to find fresh cash.
The industry experts are in favour of saying, foreign direct investment in the retail e-commerce would certainly enrich the options for the consumers and will also help in enhancing the consumer experience with better customer service and after sales services. India’s foreign direct investment policy restricts e-commerce companies from offering services to the retail consumers, which is acting a major barrier for the overall development of the retail e-commerce.
To overcome the FDI issues in the e-commerce space, Amazon.in is engaging with the government to make the FDI rules more lenient. Amazon that started with just two products in its categories- books and movies, have now extended to as many as 15 different product categories. The company currently operates in the “Marketplace model”, where the company does not directly sell products to the consumers and the customers, but provides a common platform to the buyers and sellers.
Do you think, India has great opportunity and the Indian e-commerce space has got some really string potential? Will a Permission to cent percent FDI favors Indian Economy?.
One Reply to “Understanding FDI in Retail Ecommerce Space”
India have ample reources for Hr, Finance and technology too…. Rather they can sell out the country once for all, instead of allowing 100% FDI. Bringing Swiss Indian money back can resolve every problem in the country. What do you say, Boss?