Chennai: E-commerce firms are likely to seek an extension of the 1 February deadline set by the Commerce and Industry Ministry, to comply with the revised policy on Foreign Direct Investment (FDI) in online retail, reports have said.
Online retail giants like Amazon and Flipkart, among others are likely to meet the government on the matter, it added.
A section of the media has stated that a source familiar with the development has said the companies “will need to study the latest provisions in detail and may need to bring about huge operational changes”.
The government had yesterday clarified that it has not barred online marketplaces like Flipkart and Amazon from selling products of companies where they hold stakes and banned exclusive marketing arrangements that could influence product price.
The move effectively meant tightening of norms for e-commerce firms having foreign investment did not last over the course of the New Year weekend.
The revised policy however stated that e-commerce firms have to offer equal services or facilities to all its vendors without discrimination.
“It is important that a broad market-driven framework be developed through a consultative process. We hope to be able to work with the government to promote fair, pro-growth policies that will continue to develop this nascent sector…,” Flipkart had said prior to the recent development from the Department of Industrial Policy & Promotion (DIPP) that was reported by News Today.
The new policy came against the backdrop of several complaints being flagged by domestic traders on heavy discounts being given by e-commerce players to consumers.
According to the current policy, 100 per cent FDI is permitted in marketplace e-commerce activities. It is prohibited in inventory-based activities.
The DIPP stressed that the provisions are not against the interest of consumers, noting that only fair, competitive and transparent business practices would be beneficial for buyers.
The Confederation of All India Traders (CAIT) however was not happy with recent developments and went on to say, “The new note is a simple stupid confusion or losing guts and backtracking”.