Flipkart, others pitch for 100% FDI in e-commerce sector

Commerce and Industry Minister Nirmala Sitharaman on Thursday discussed various issues, including tax related to foreign direct investment (FDI) in the e-commerce sector, with leading e-tailers Flipkart, Snapdeal and industry associations, which pitched for 100-per cent FDI in the sector.

After an hour-long meeting with stakeholders, Sitharaman told reporters: "More such discussions will happen with industry representatives and state governments. It was the first meeting... We are not taking any position this way or that way from the ministry. We have heard everybody. In fact, this is not going to be sufficient."

Representatives of CII, Ficci, Nasscom, USIBC, ebay, Ikea, H&M, Japan Plus, Decathlon, Amazon, and Confederation of All India Traders attended the meeting.

Currently, 100-per cent FDI is allowed only in business-to-business (B2B) e-commerce and not in the retail segment. The government is, however, non-committal on changing the FDI policy for the e-commerce sector.

Meanwhile, industry chambers demanded 100-per cent FDI in e-commerce retailing. "The idea is to emphasise that there has to be a parity between online and offline retail policy with respect to FDI levels," Ficci said in a statement.

Sitharaman said the meeting was to "understand the broader context of e-commerce and the way in which they (industry) need FDI, they may not need FDI". "Is it affecting the level-playing field of the brick and mortar stores. All these are being discussed."

Global players are looking at India because the country is one of the fastest-growing markets in Asia-Pacific along with China. Rise in Internet penetration, adoption of smartphones and lower data rates are completely changing the way India shops.

Analysts said online shopping is expanding at a massive rate. According to estimates, the sector's market size in the country is at around $5 billion annually.