FDI violation in ecommerce under check with new dedicated team


A separate dedicated with has been formed to keep a check on the FDI rule violations and implement the guidelines effectively. The team comprises of the officials from industry department and the Enforcement Directorate. It aims at strengthening the implementation of the rules and the guidelines for the foreign investment in Indian eCommerce sector.

Indian e-commerce is definitely trying to widen its framework but it is working hard to keep a check on all the foreign interest in online retail by companies like Amazon, Flipkart, Myntra, and others. This wing is a temporary solution until any national policy is formed on e-commerce regulations. It aims at checking any misuse of the current policy until a well-defined national policy is formed.

The inter-ministerial group is going to take a move on defining a single legislation on the e-commerce activities of India like buying, selling, distributing, and marketing of goods and services.

Removing the Ambiguity

The changes in the guidelines have been proposed to remove any ambiguity around the guidelines, which the giants like Amazon and Flipkart claim to have adhered to. Retailers have alleged that marketplaces operators have misused the restrictions on defined guidelines prompting the immediate action by the concerned department.

Even brick-and-mortar retailers have alleged the online players of continuously manipulating the cost and offering unjustified discounts to increase their sales. The traditional retailers also claim that since the online players and getting unrestricted funding from overseas, they can apply any among of discount which is not possible in physical stores. This is giving rise to unfair play in the retail industry. Even online vendors have filed a complaint against such marketplaces and mobile phones sellers who offer an unjustified discount on their platform, somehow affecting the sales of physical stores.

Amazon and other foreign-funded companies like Flipkart, ShopClues, and SnapDeal are getting 100% foreign investment which is meant to provide business just a platform to conduct their business. A sub-group of this special wing has suggested limited inventory for these marketplaces, which has still not been approved.

The new team is also supposed to look into the implementation of customs duty on the digital products.



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