Government to give retailers easier ticket to join ecommerce

There is some excellent news for traditional Indian retailers. According to the buzz, the government is making it easier for Indian manufacturers and retailers to start selling their goods online without additional approval for the same. This will largely benefit those retailers and merchants who were wary of selling online out of the fear of transgressing any business laws set up by the government. This includes Indian retailers like Fabindia, Hidesign, Biba and Nakshatra who are waiting to jump onto the ecommerce bandwagon.

Finance minister Arun Jaitley had already articulated his pro-ecommerce stand when announcing his maiden budget. Last July, he had said, “FDI in the manufacturing sector is today on the automatic route. The manufacturing units will be allowed to sell its products through retail including e-commerce platforms without any additional approval.”

Several executives had sought clarification about this statement, because apparently the erstwhile laws did not allow the domestic players to conduct online business freely. Presently, Indian retailers with any form of FDI are not allowed start trading online. For example, Fabindia is owned majorly by Indians, but is not allowed direct B2C ecommerce because foreign entities like L Capital, the private equity arm of LVMH have an investment in it.

This restriction has also forced many online companies like Flipkart, Amazon and Snapdeal to work as an online marketplace, which basically allows several retailers to get onboard. Interestingly, this proved extremely beneficial in increasing their product base and also in breathing new life in the Indian manufacturing and retail sector. This has albeit come at the price of traditional brick-and-mortar stores losing their charm.