New Delhi: State governments on Wednesday suggested that the interest of small retailers and consumers should be protected while promoting foreign direct investment in retail and e-commerce.
Several issues pertaining to foreign direct investment (FDI) in multi-brand retail and emerging e-commerce business in the country were discussed during a meeting chaired by Commerce and Industry Minister Nirmala Sitharaman here.
"Today Government of India invited states to (discuss) the issue of FDI in e-commerce (both) B2B and B2C and also bringing FDI in multibrand retail," Haryana Finance and Industry Minister Captain Abhimanyu told reporters after the meeting.
"But one consensus between the states and the centre was there that whatever decision is taken, it must be taken after a good deliberation and after engagement with stakeholders at state levels and after assuring ourselves that the interest of the consumers, small retailers as well as SME sector are protected," Abhimanyu said.
"All the states will give their views and comments on the matter within 15 days to the Centre," he said, adding case studies should done to see the impact of permitting FDI in retail and e-commerce in different countries.
Sharing views on protecting interest, Punjab Industries and Commerce Minister Madan Mohan Mittal said that issues related with FDI in multi-brand and retail need clarity.
Jammu & Kashmir Minister for Industries Chander Prakash said that it was not possible to ignore the emerging e-commerce business in the country but "we have to be careful while introducing (FDI) in e-commerce".
"The FDI in e-commerce needs more debate and discussion. More meetings will be held on the issue. We will discuss the pros and cons in detail in our state. States ask for more time on the issue," Prakash said.
However, some states, including Tamil Nadu are opposed to any kind of FDI in retail and e-commerce.
The Haryana Finance and Industry Minister also said, "There were suggestions that if China can have company like Alibaba then why not India. India also has the potential to bring company like that. We have large market place, strong technological background, we are software giants in the world."
At present, 100 per cent FDI is allowed in business-to- business (B2B) e-commerce. However, FDI in business-to -consumer (B2C) or e-retail is prohibited.
Global retail giants as well as domestic e-tailers want government to relax foreign investment norms for the retail e-commerce sector.
States and UTs which did not attend the meeting include Bihar, West Bengal, Maharashtra and Delhi.
Official sources said the states asked for a comprehensive definition of e-commerce.
They said the Jammu and Kashmir government was in favour of e-commerce but want traders to be protected.
Parliamentary Secretary from Assam R P Singh said that regulatory frameowrk for e-commerce should be shared with states and protection of consumers should be ensured.
The Additional Chief Secretary (Industries) from Gujarat stated that no policy could be permanent and if any changes were to be done, more time should be given to the states.
He stressed that e-commerce players should not be treated just as intermediates but as retail players.
During the meeting, sources said, Sitharaman pointed out that presently there was no clear definition of e-commerce and issues have cropped up relating to the FDI policy and guidelines for B2B segments.
The Industry Minister from Uttar Pradesh stressed on the need for including mobile-commerce as part of e-commerce. He suggested that a timeline should be incorporated in payment receipt and a deadline should be fixed for payment by e- commerce platform provider in respect of supplies from SMEs.
Madhya Pradesh Industry Minister Yashodhara Raje Scindia said that the Centre should provide a level playing field between e-commerce and physical retailers.
She highlighted the need for a strong regulatory mechanism for e-commerce and said that FDI could be considered for the B2C (business to consumer) segment also.
The representative of Chattisgarh too suggested that m-commerce should be included in the definition of e-commerce.
The sources said that the Goan Industry Minister suggested that effective control in respect of e-commerce companies should be in Indian hands by ensuring that FDI limit remains below 100 per cent.
He stressed on the need for a balance between market place and inventory-based models, and market place model players should be asked to ensure 50 per cent of orders as inventory.
The Punjab Minister asked to follow a single set of rules for both physical retailers and e-commerce players and stressed on the need for monitoring the anti-competitive practices.
Odisha suggested amendments in the taxation till GST is implemented.
Sources said that the representative from Karnatka strongly supported FDI in B2C segment and also suggested that retailers should be encouraged to attract foreign capital.
The Principal Financial Secretary from Andhra Pradesh favoured a liberalised FDI policy and suggested amendments in the taxation for e-commerce.
