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Amazon, Walmart push hard to extend FDI guidelines in e-commerce

Traders warn of nationwide stir against stretching deadline; while DIPP not in favour of extension, senior officials to mull issue after returning from Davos

Subhayan Chakraborty & Karan Choudhury 

Photo: Shutterstock

majors and are pushing hard to secure an extension of the government's February 1 deadline for the new guidelines, but domestic traders have threatened a nationwide campaign if this does take place.

While the (DIPP) is not in favour of an extension, officials said a final call on the matter is yet to be taken.

Senior officials are currently in Davos, Switzerland, to participate in the World Economic Forum. A meeting on the matter will be held only after they come back.

"Any extension/ deferment/amendment or change in FDI policy in at this stage will be conceived as a weakness of the Govt which will also have political fallout," Praveen Khandelwal, Secretary General of the Confederation of All India Traders (CAIT) bluntly said.

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Khandelwal added that CAIT will also launch a nationwide campaign against any such move. The CAIT has also demanded that the should immediately convene a meeting of stakeholders and make the stand clear to end the confusion and bring an end to pressure tactics of global players and their mentors at the US.

Policy flip-flop

Major e-commerce players have seen the red over restrictions on private labels and flash sales.

An aggressive push by e-commerce majors over the New Year weekend to force the government into a parley seems to have paid off, with the latter clarifying there are no restrictions on private labels being sold by e-marketplaces.

The sharp reversal of policy by had come barely a week after the government had explicitly restricted such sales and is the latest development in an intense ongoing debate on e-commerce rules.

An entity having equity participation by e-commerce marketplace entity or its group companies, or having control on its inventory by e-commerce marketplace entity or its group companies, will not be permitted to sell its products on the platform run by such marketplace entity and DIPP's press note 2 (2018) had said initially.

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This had the effect of bringing together the two largest e-marketplaces, India and Flipkart. These two currently have 30 private labels covering 200 different categories. They have together spent $1.5 billion in the country to expand their private labels, and have major expansion plans. A senior functionary from one of these majors argued that they were staring at huge losses as significant capital has already been spent on infrastructure, staff, and marketing.

First Published: Fri, January 25 2019. 14:59 IST