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DIPP puts e-commerce FDI on back burner

Friday, 13 Dec 2013
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The department of industrial policy and promotion (DIPP) has put the foreign direct investment (FDI) approval in the e-commerce space, on the back burner, in order to protect local retailers.

 

The move has been made as the DIPP fears that the political ramifications of foreign companies may wipe out local retailers. At present, retail trading in any form by means of e-commerce is not permissible though 100 per cent FDI is allowed in business-to-business through the automatic route.

 

Besides, the DIPP is also concerned that loopholes in the policy may lead global multi-brand retailers to invest in the online mode rather than the actual infrastructure mode. The issue has another complexity as, apart from retail in goods, e-commerce includes financial services such as insurance and shares.

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