Manufacturing cos may get to sell products directly online

The Union Cabinet is likely to take a decision tomorrow on allowing foreign and domestic companies with manufacturing units in India to sell their products through online portals directly to consumers.
The proposed move is aimed at boosting the manufacturing sector, an official said.
According to a proposal of the Department of Industrial Policy and Promotion (DIPP), those companies manufacturing in India and even with FDI up to 100 per cent would be permitted to sell their products through the e-commerce platform.
The latest move, sources said, is a follow-up to the announcement made by Finance Minister Arun Jaitley on July 10 last year.

At present, ambiguity surrounds direct online sale of goods by companies with manufacturing units in India, especially on the FDI component. Under the current FDI policy in e-commerce, FDI is allowed in B2B, but prohibited in B2C.
In his Budget speech, Jaitley had said: "FDI in the manufacturing sector is today on the automatic route. The manufacturing units will be allowed to sell their products through retail, including e-commerce platforms, without any additional approval".

DIPP has also proposed a definition of manufacturing as per the Income Tax Act in order to allow online sales.
If the proposal goes through, arms of foreign firms with manufacturing facilities in India producing various products under multiple brands would also be able to sell directly to consumers through e-commerce portals.

At present, manufacturing companies in sectors such as mobile phones and electronic items tie up with domestic e-commerce players to sell their products.
Under the 'Make in India' programme, the government is taking steps to improve ease of doing business in the country, besides easing norms for foreign direct investment.
In the last few months, the government has eased FDI policy in sectors, including defence, construction, railways and medical devices.
The government looks to increase the contribution of manufacturing in GDP to 25 per cent in the next one decade from the current 16 per cent. It also aims at creating 100 million jobs during the period.