FDI policy on e-Commerce should protect the interests of small merchants
E-commerce marketplace platform should not have any direct or indirect control over the inventories, industry chamber PHDCCI said.
New Delhi: Foreign companies who are allowed to setup up only e-commerce marketplace platform should not have any direct or indirect control over the inventories, industry chamber PHDCCI said on Monday.
For this to happen, the chamber said that the definition of group companies should be extended to include companies operating the marketplace platform itself, its group companies, its affiliates companies, its associated enterprises, its related parties, and any other person controlled, directly or indirectly, by above or in which the person in the companies mentioned above have any direct or indirect equity or economic participation in any manner.
In a set of suggestions for inclusion in the FDI policy on E-commerce, the chamber said that e-commerce marketplace entity having FDI should not be allowed to control inventory, directly or indirectly, as it tantamount to prohibited multi-brand retailing by foreign companies.
Therefore, the definition of marketplace based e-commerce and inventory-based model of e-commerce should be defined as an information technology platform by an e commerce entity on a digital & electronic network to act as a facilitator between buyer and seller.
The suggestions, the chamber said, are aimed at protecting the interest of 8 crore small merchants and the livelihood of 30 crore people dependent on them. The chamber believes that while the government has come out with a policy to protect the interest of the smaller merchants, there are still some issues that need to be addressed.
PHDCCI said that an inventory based model of e-commerce should mean an e-commerce activity where the inventory of any of the goods or services sold on the e-commerce platform is directly or indirectly owned or controlled by the e-commerce entity and is sold to the consumers directly.
If any goods or services which are sold by the Group Companies are resold in the e-commerce platform, then such activity shall also be treated as inventory based model of e-commerce.
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