Indian Government May Allow FDI In eCommerce Soon

The Indian Government has been taking steps to open up Foreign Direct Investment (FDI) in the ecommerce sector. There are expectations that it may relax the current regulations before the financial year is out.

Offline retail has a much liberal FDI norms and by contrast ecommerce has been subject to much stricter regulations. If the Government brings in a more liberal regulation list for Ecommerce, then many international online stores like WalMart, Amazon, Best Buy, Target could gain entry into the country and operate here.

The Department of Industrial Policy and Promotion (DIPP) is discussing the issue with many industry stakeholders and will release a discussion paper on it by the end of the month. Ecommerce is growing rapidly in the country. Habits are changing visibly and more people are buying online than ever before. With more direct foreign investment into the sector, a larger number of people will get onto shopping online. Online merchants will get more options when it comes to new online marketplaces springing up in the country.

Many  online companies in India have had major problems when it comes to raising capital for their ecommerce units. This has been primarily due to the strict FDI rules. This has eventually led to those business units closing down. This scenario is bad for both ecommerce companies and online merchants. With the rules relaxed, we are hoping that there will be more transparency and opportunity for people selling and buying their products online.