Centre calls states meeting to discuss FDI in e-commerce

The Commerce and Industry Ministry has called a meeting of states on July 15 to discuss foreign direct investment (FDI) in e-commerce retailing and other related issues.

The issues which would come up for deliberations include definition of e-commerce, tax related matters besides other pertaining to working of e-commerce industry, sources said.

The ministry has written a letter to all Chief Ministers requesting them to nominate the concerned minister on the matter to participate in the meeting, which will be chaired by Commerce and industry Minister Nirmala Sitharaman, they said.

Last month, the ministry discussed the matter with all stakeholders, including major domestic e-commerce companies such as Flipkart and Snapdeal.

After that meeting, Sitharaman had said the meeting was to understand the broader context of e-commerce and whether FDI in the sector is affecting the level-playing field of the brick and mortar stores.

At present, 100 per cent foreign direct investment is allowed only in business-to-business (B2B) e-commerce and not in the retail segment.

Global retail giants, including Amazon, and the domestic industry want the government to relax the foreign investment norms in the e-commerce space.

Global players are looking at India because the country is one of the fastest-growing markets in Asia-Pacific, along with China. Rise in Internet penetration, adoption of smartphones and lower data rates are completely changing the way India shops.

According to estimates, the sector's market size in the country is at around USD 5 billion annually. Analysts said online shopping is expanding at a massive rate.