Indian Government to Relook at FDI Ban in E-commerce

Prime Minister Manmohan Singh
Prime Minister Manmohan Singh

Under fire for holding back on reforms, the Indian government is now planning to re-look at allowing foreign direct investments into e-commerce. The new report, soon after Prime Minister’s return from the G20 summit, indicates that the government has softened its stance on allowing FDI in E-commerce.

The Prime Minister’s office has asked the ministry of Commerce & Industry to examine if FDI can be allowed into e-commerce, reports The Hindu Business Line.

The report citing notes from an inter-ministerial meeting said:

As regards the possible US requests for FDI in e-commerce/e-retailing, the possibility of a clarification that the provisions for multi-brand retailing/single-brand retailing would apply on all such activities would be examined. The need for Indian e-commerce companies to seek FDI would also be kept in mind.

After relaxing the FDI norms in September last year to allow foreign ownership of multi brand retail in India, the government singled out E-commerce and said that FDI is now allowed in the sector. Later in March this year, the government re-affirmed the ban on FDI in E-commerce.

American ecommerce giant Amazon has been pushing hard to gain access to the $400 bn Indian retail market.  In February, Amazon’s global Vice President Paul Misener met India’s trade minister Anand Sharma and discussed the creation of a favorable policy environment for Amazon to do business in India, which is otherwise not allowed in the country.

The company recently launched Amazon marketplace in India.

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