April 05, 2016
Catalogs | Buyers | Sellers | Trade Shows
OTHER NEWSLETTERS Exim Apparel & Fashion Automobiles Chemicals Gift & Crafts
FDI in e-retail

The Centre last week came out with new FDI guidelines in retail e-commerce. As per the new norms, 100 percent FDI under automatic route is permitted in the 'marketplace model' of e-commerce; such entities are barred from influencing the pricing of goods sold on their platform; and they are no longer allowed to sell more than 25 percent of their total sales through any one vendor or their own group companies. Clearly, this move is aimed at removing ambiguity and bringing in a badly needed clarity, but at the same time it does raise a bigger question – how can this latest move benefit or hurt the sector?

The new guidelines come with clarified definitions of 'e-commerce', 'inventory-based model' and 'marketplace model' and thus leave no room for ambiguity. Until recently, there was no such clear definitions and a few firms were allegedly working around this ambiguity, often inviting legal challenges. The clarity will also pave way for new foreign investors and global e-commerce firms who have not yet entered the India market. As a result, more investments will come, more jobs will be created and additionally as the newcomers will come with their own sets of requirements, several other sectors such as warehousing, logistics and packaging and realty are likely to get a booster shot.

It is said that predatory pricing by e–platforms will come to an end now. The government claims that this will help create a level playing field for online and offline retailers while some critics express concern that rise in prices may make the e-commerce marketplace unattractive to customers. I think both these views are a little oversimplified, because brick and mortar retailers are still not permitted to get FDI and e-commerce platforms will still be able to ride on factors such as the convenience they offer. In addition, the move may prove a blessing in disguise for those firms which were allegedly involved in predatory pricing, leading to their profitability, as discounts are now to be absorbed by their vendor partners.

There are some concerns, however. The new guidelines, for example, direct that the sellers – not the e-commerce platform – shall be responsible for post sales, warranty and guarantee of goods sold by it. This may affect customer confidence in a big way. Also, what will happen to those FDI backed firms which were – before announcement of the new guidelines – operating a inventory-led model or a mixed model of inventory and marketplace. Should they be asked to shut shop? Can we afford to ignore the inventory lead model at a time when we are prioritising the Make-in-India drive? It seems the policy still needs much refinement, though as the first step it is long overdue and a welcome move.

I invite your opinions.

Popular Stories of the Week
MSME schemes: Where do the funds go
Under the Credit Guarantee Fund Trust for Micro and Small Enterprises...
More...
Loans of 1.25 lakh cr sanctioned for MSMEs under MUDRA
As many as 3.30 lakh people have been disbursed loans totaling 1.25 lakh crores...
More...
GOVT. ANNOUNCEMENTS OF THE WEEK
RBI cuts key lending rate by 25 basis points
The Reserve Bank of India on Tuesday cut its key lending rate by 25 basis points in line with...
More..
GST will be rolled out soon: PM Modi
Assuring Saudi and Indian business leaders that his government is working to...
More..
News you can't miss
» Eight core industries' output accelerates in Feb
» 'Industry very optimistic with announcements made in Delhi's Budget'
» Business conditions improve in March, indicates PMI
» India seeks New Zealand's cooperation for dairy industry
» Govt allows conditional foreign equity in e-retail
» Panama Papers Leak: India sets up multi-agency probe team
» Immense scope for increasing India-Australia trade: Jaitley
» Creative approach can help realise India-EU FTA: Modi
» India Inc needs to be more transparent and credible: FM
» Rate cut hopes to strengthen rupee: Experts
» Fiscal deficit, divestment targets for 2015-16 met: Govt
» GDP likely to grow this fiscal at 7.6 pc: FM
» 'Gujarat, Maharashtra contribute 46 pc to India's exports'
» EU, India agree to strengthen strategic partnership
» Foreign equity will propel e-commerce retailing: Experts
More Headlines
 
Trade Fair & Exhibitions 2015
Click for More..
 
Featured products
Dewatering Pumps Gun Drilling Bits Industrial Solar Water Heater
Conveyor Belts More
Products..
Latest Free Indian Tenders
» Replacement Of Faulty Eb Main Switch With 100A Change Over At Te Ganguvarpatti.
» Providing Services Of Data Entry Operator For Offices Under E.E. (E) Dttdc Ltd. Sriniwaspuri, Lajpat Nagar, Delhi
» Providing Earthing For Telephone Exchange Highwavys.
» Help In Maintaining The Honey Bee Colonies Cleaning Aplary Area, Field Laboratory And Field Laboratory Areas.
» Supply Of Edta Powder (Sachet Packet) For Emt Use.
» Appointment Of Mandi Transport Contractor.
View More..
INTERVIEW OF THE WEEK
Couponing is a great way for eCommerce sites to drive conversions: CEO, CouponDunia
Couponing websites are an easy way for e-tailers to distribute and advertise their coupons, as the traffic on such couponing sites is of high intent shoppers who are hunting for bargains; thus it is a great way for eCommerce sites to drive conversions and for shoppers to save money, said Sameer Parwani, Founder & CEO, CouponDunia.....
More..
COUNTRY IN FOCUS   FEATURED ARTICLE
Thailand
Annual Economic News for Thailand for the periods December 2015 giving latest updates on developments directly affecting India's foreign trade and investment.
More..
 
Doubling farmers' income by 2022 will prove Herculean
After adjusting for rising costs, an Indian farmer's income effectively rose 5 percent per year over the decade (2003-2013)...
More..
Latest Buy Trade Offers   Customs Exchange Rates
- Underground Well Inspection Camera
- Zenith Roller
- Markmate Pneumatic Machine
- Blood Culture System
- Pneumatic Drilling Compressor
- Counter Sunk Making Tool
View More Buy Trade Offers
 
Currency Import Export
US Dollar 67.45 66.40
UK Pound 96.60 94.45
Euro 76.05 74.20
Japanese Yen 60.15 58.80
Get the latest rates for April
April 2016
» CONFAIR 2016 » Global water tech expo 2016 » Media Expo - Delhi 2016 » Food Mech Asia - Nagpur 2016 » Palm Expo - Mumbai 2016 » Surat International Textile Expo 2016 » KBC Kitchen & Bath China 2016 » China International Rubber Tire & Auto Accessory Exhibition 2016 » DIEMOULD India 2016 » China International Tyre and Rubber Expo-2016 » International PackTech India and FoodPex India » The International Commercial Vehicle Fair 2016 » Secutech India 2016 » AgriHorti Tech India 2016 » TECHNOTEX 2016 » International Trade Expo 2016 (Wood & Woodworking Industry ) » China Sign Expo 2016 » AMTEX 2016 » FMC China 2016 » Surat International Textile Expo 2016 » Photo Today - Bengaluru 2016 » Image Today - Chennai 2016 » LED Expo Mumbai 2016 » AgriTalk India - Himatanagar 2016 » G-Fair Mumbai–Korean Products Exhibition 2016 » SPS Automation India 2016 » Green Architecture and Construction Materials Expo 2016 » Solar Urja Expo 2016 » 5th Year- Industrial & Engineering Expo ( Indexpo) –Indore-2016 » India Chem 2016 » OFI - Oils & Fats International India 2016 » CITEXPO - China International Tire Expo 2016
Click here for more trade shows.
You have received this mail because you have subscribed for trade india's Exim Newsletter.
To unsubscribe Click Here