The Indian government seems to have reiterated its stand that it won’t allow multi-brand retailing by foreign ecommerce companies. This was conveyed directly by none other than the country’s Commerce and Industry Minister Piyush Goyal. He conveyed this at a meeting where representatives of companies like Amazon, Flipkart and eBay were present. The other stakeholders present at this meet were Facebook, Dell, SAP, Google, PayPal and IBM.
He used the term “agnostic platform” to describe the ecommerce platforms as far as retailing of multi-brand products are concerned. The assertion by the minister is in line with the policy clarification note issued last December giving time till February 1, 2019, to the companies to clean up their act and fall in line.
The backdoor method being employed by Amazon and Flipkart to circumvent the FDI rules by acting as sellers on their platforms was in a way scuttled by that notification and the companies are naturally feeling the heat. Some Indian companies were possibly still not convinced and the question they are asking is if these ecommerce platforms are meant to be simply agnostic, why would they post millions of dollars in losses? They said the part of the FDI rules which insists on a statutory audit certification be also implemented.
In another meeting that the Commerce Minister held, the FDI rules and the ecommerce policy that is being worked on were discussed. It is being pointed out that the issue of ecommerce could figure in the upcoming G-20 summit in Japan. India’s stand on the issue has to be enunciated at the meeting and the minister might have wanted to share the opinion among the industry players.
Officials from NASSCOM, Infosys, Wipro, WNS, NIIT Tech, Tech Mahindra, Quatrro, Cognizant and Data Security Council of India were present in one of these meetings. The issue of data security is said to have figured here, which gets dovetailed to the ecommerce trade. Foreign companies setting up shop in India collect personal details of Indian citizens. How this data is handled is the Indian government’s responsibility and this area needs to be established clearly. The RBI has already insisted on the servers hosting the data being located within Indian borders.
In these series of meetings, the minister had covered several issues and going ahead, there may be clear directives flowing from the Ministry on each of these areas. The bottom line is the country wants to encourage FDI in every sphere, but at the same time protect the Indian firms from being destroyed due to uneven competition from the foreign companies.