This refers to the report "Govt turns down FDI in retail e-commerce" (June 10). In support of the government's decision the following point needs to be appreciated: B2B e-commerce is facilitating value creation. This has enormous forward linkages that are in keeping with the national strategy of enhancing the ease of doing business. It has, for these reasons, the potential to boost the sagging manufacturing growth in India. However, B2C is about backward linkages and is seen as facilitating consumption (absorption of value). It can create demand where none exists. So, investments into such facilities, before the secondary sector is revived, could prove wasteful. Investments into B2B e-commerce, on the other hand, would boost supply along with demand.
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