India will not allow foreign companies to invest in eretailing of domestically produced goods, even though a draft commerce ministry report recommended 49 percent foreign direct investment (FDI) in the sector.

Speaking at a seminar organised by Swadeshi Jagaran Manch – a rightwing economy policy group – department of industrial policy & promotion (DIPP) secretary Ramesh Abhishek said that there are no plans to allow foreign investment in B2C (business to consumer ) ecommerce sector for goods produced in India.

"Since FDI is not allowed in multi-brand retail, we cannot allow it in ecommerce ventures selling goods produced in India,” Ramesh said.

DIPP is the nodal agency in charge of India’s FDI policy. India allows FDI in ecommerce sector through the marketplace model wherein the portal cannot hold inventory sold through customers.

Recently, the draft ecommerce policy submitted by the department of commerce had recommended 49 percent FDI in eretailing of domestically produced goods through online platforms that may be allowed to own limited inventory.

It also recommended data localisation for ecommerce sector and ban the bulk purchase of goods like cellphones and apparels. After protests from several foreign-owned eretailers as well as objections from government departments and think-tanks like NITI Aayog, the draft policy will be discussed once again with stakeholders.

Several participants at the seminar, including Swadesh Jagaran Manch complained to the DIPP secretary about “deep discounts” offered by foreign-funded ecommerce companies and its adverse impact on domestic sellers and brick and mortar stores.

Ramesh said that his department has received multiple complaints on the issue, which have been forwarded to the Enforcement Directorate.

Complaints on the FDI policy violations with reference to press note 3 should be investigated, Ramesh said, adding that he discussed the complaints against etailers with finance secretary.

FDI Press Note 3 of 2016 mandated that foreign-funded etailers cannot influence the pricing of goods and services.

First Published:Aug 28, 2018 4:06 PM IST