Indian e-retailers are seeking a change in foreign direct investment (FDI) policy and want the Government to permit FDI in online multi brand retailing and inventory led model. Last month, the Union Government’s decision to bar FDI in ecommerce has led to some amount of depression among the online retailers in the country.
At present, the Indian Government permits 100 percent FDI in cash and carry, online marketplaces, single brand retail as well as business-to-business (B2B) e-commerce. The Government also allowed up to 51 percent FDI in multi brand offline retailing last year. However, multi brand retailing in ecommerce and inventory led model is completely prohibited.
Mr. Mukesh Bansal, CEO and co-founder of Myntra.com, one of the leading domestic online apparel retailers in India, told fibre2fashion, “E-commerce companies and various industry bodies are approaching the Union Government and updating them on the benefits of FDI in this sector.”
“We want the Government to treat e-commerce companies as Information Technology (IT) or Information Technology Enabled Services (ITES) companies and base policies accordingly,” he adds.
With the rapid growth in Indian apparel ecommerce, several global online retailers like Amazon and eBay have sought relaxation in the Indian FDI policy.
Ms. Deepa Thomas, ecommerce evangelist of eBay India, which is one of the global e-retailers present in India through marketplace platform, says, “With regard to FDI in ecommerce, we always have and will continue to encourage the development of India’s ecommerce ecosystem.”
According to a report by Internet and Mobile Association of India (IAMAI), online retailing by branded apparel segment in the country witnessed a year-on-year growth of 84 percent, this indicates rising consumer preference for shopping online in clothing.
The FDI in online retailing, once permitted, is expected to open new scope for domestic retailers and it will also let the Indian ecommerce market mature.