Govt to soon issue 'clarification' on FDI in e-commerce: Piyush Goyal

Minister rules out amendments; development follows complaints that some e-commerce behemoths have been flouting the policy rolled out by govt

The Department for Promotion of Industry and Internal Trade (DPIIT) will soon issue ‘clarification’ on foreign direct investment (FDI) in e-commerce, amid complaints from some segments of the industry that some e-commerce behemoths have been flouting the policy rolled out by the government.

“The FDI policy has been crystal clear ever since it first came up, but certain instances have come to our notice that the policy is not being followed in letter and spirit. We will be clarifying that very shortly,” commerce and industry minister said in a virtual briefing. The minister added that the FDI policy, however, will not be amended.

The development comes in the backdrop of domestic traders' body over the last few years crying foul and urging the government to take action against e-commerce giants such as Amazon, Flipkart, alleging that they have been flouting the FDI policy norms by promoting preferential sellers, influencing product prices, and following various anti-competitive practices.

In December 2018, DPIIT had also issued a clarification via a ‘Press Note’ comprising FDI guidelines in the past, tightening norms for online retailers and for better enforcement of these rules. However, offline traders claim that these companies have still managed to circumvent the local laws.

In the past, DPIIT had also issued clarifications via a ‘Press Note’ comprising FDI guidelines, to tighten norms for etailers and for better enforcement of foreign investment rules. However, offline traders claim that these companies have still managed to circumvent the local laws.

When asked about the timeline for the announcement of the much awaited e-commerce policy, Goyal said that the government has recently announced e-Commerce rules under the consumer protection act. “This is a series which involves consumer affairs, FDI policy and e-commerce policy,” he said.

“We believe that our most important stakeholder is the consumer and we wanted to make sure that consumer protection prevails over everything else. By announcing the e-commerce policy for consumer protection, we have demonstrated that our first and foremost concern is the consumer, 130 crore Indians are our first and foremost priority,” Goyal said.

The consumer affairs ministry had last month proposed slew of changes in the consumer protection rules to protect the interests of consumers and also make e-commerce companies more accountable and responsible. The rules have created quite a stir among companies, with some even anticipating a change in their business structure if the rules were to be implemented.

The consumer affairs ministry has sought comments from relevant stakeholders by 6 July.