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The ongoing consultations on the need to tweak the existing FDI policy for e-commerce has divided the industry. While various industry bodies, which met the officials of the Department for Promotion of Industry and Internal Trade (DPIIT) on Friday, tried to present a common ground, internal communications between the members of these industry associations indicate various lobby groups working at cross purposes.
“There are a group of companies that back the views of foreign e-commerce companies including Amazon and Flipkart. This group wants a status quo in policy. Then there are others which back local retail companies, including Reliance Industries, and this group wants to reign in the foreign players,” said an industry executive present at the meeting.
The divide comes to the fore in a letter written by Federation of Indian Chambers of Commerce & Industry (FICCI) chief Uday Shankar to the Ministry of Commerce and Industry, which is anchoring the debate on the proposed change in law.
Two different views
In a letter addressed to Guruprasad Mohapatra, Secretary, Department of Industrial Policy & Promotion in the Ministry of Commerce & Industry, Shankar clarified that the FICCI spokesperson at the meeting on Friday “inadvertently mentioned” the two different views that emerged at the meeting as “majority” and “minority”.
According to sources in the know, during the meeting, a FICCI representative said, “All our members feel (except one) that the current conditions provided under the FDI policy applicable to e-commerce entities having FDI are comprehensive, clear and robust. Members also said that they are adequate for regulating the e-commerce companies.”
Shankar, in his letter, said: “I would like to clarify that the views expressed today are held by one group of our e-commerce members but there are other views that are equally widely held and, as such, it is not possible for us to identify either a “FICCI view” or “majority” view,” he clarified.
Shanker, then clarified the “official FICCI position” recommending policy stability, transparency, and continuity in the e-commerce policy. A copy of the letter was reviewed by BusinessLine . “Needless to say that any policy must be strictly implemented in letter and spirit and the law of the land has to be strictly abided by any company, be it foreign or Indian, big or small,” he said.
The letter further added that “if the government or authorities feel that any company irrespective of the ownership is found violating the law, the government may speak with them directly and take appropriate action. FICCI supports effective implementation of FDI policy.”
The Centre is scheduled to meet e-commerce companies such as Amazon and Flipkart on March 25.
This comes even as Amazon and Walmart-owned Flipkart are engaged in a battle with Reliance Industries for a larger share of India’s retail market. Amazon is already fighting Reliance’s acquisition of Future Retail in courts. “The debate on policy is another battle front that has opened up again where the two sides have taken their positions. There is a lot of internal pressure within all major industry bodies to back claims made by both sides,” said another industry source.
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