>Impact of Draft e-commerce policy on India’s retail market
draft e commerce policy on indian retail

Impact of Draft e-commerce policy on India’s retail market

For promoting ‘Indian online enterprise’ the draft e-commerce policy of government makes a powerful case. This draft e-commerce policymay have extensive suggestions for e-commerce owned by foreign which are operating in India. By influencing the prices of sales, directly or indirectly, group companies of e-commerce players can be barred. This all means that with subsidiariese-commerce majors’ retail strategies may have restrictions.

In this draft, it is clearly mentioned that purchases in bulk of branded goods such as fashion items, mobile phones, white goodswill be forbid to the related party sellers by which price distortions happens in the marketplace. In the final policy, it is accepted then it can definitely affect big e-commerce player’s sale strategies. In draft e-commerce policy, it is also suggested that if the products are produced domestically then Indian-controlled and India-owned online marketplaces will be allowed to hold the inventory. If the entities are controlled by the foreign investment, then this type of relaxation is not available to those marketplace e-commerce companies.

This draft also suggests that those founders of India, who have minority stakes, should be given more control by distinctive voting rights. It means all about e-commerce firm of India, where the promoter or founder is the Resident of India and company’s platform under the control of Management of India and investment of foreign doesn’t go beyond of 49%. A suggestion of creating a separate wing in Enforcement Directorateis also given in the draft. So that the any grievances which are related to Press Note 3 can be handled. It also gives guidelines in details for foreign investment in e-commerce.

For acquisitions and mergers which distort competition, Greater regulatory scrutiny is recommended. And it is suggested to have a relook on the reasons which forms anti-competitive practices and entry barriers. To tackle these exercises, the Competition Commission of India will look into this matter. The recent acquisition by US retail major Walmart of Flipkart can also come in the light.

To validate the current businesses of e-commerce companies which are operating in India, our government has sanctioned 100% FDI (foreign direct investment) under the ‘marketplace model in online retail of services and goods via automatic route.A sunset period of two-years suggested in the draft before make it mandatory to localize data. This draft favors simplest procedures of GST for e-commerce by permitting centralized registration.

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