Govt likely to drop draft e-commerce policy

Shreya Nandi & Priyanka Sahay
Moneycontrol News

The government has decided to drop the much talked about draft of e-commerce policy that proposed allowing 49 percent FDI in inventory model as the nation heads towards a crucial election, according to sources privy to the development.

Instead, the plan is to set up a committee of secretaries which will decide on new set of recommendations.

It wasn't immediately clear if this committee will include the proposals mentioned in the first leg of draft policy or not.

The draft policy was expected to be released by the last week of August.

Moneycontrol first reported that allowing 49 percent foreign direct investment was proposed in the inventory based e-commerce companies.

Also read: Govt mulls easier rules for partial inventory. Is it FDI in B2C e-commerce by another name?

The idea according to the government was to promote its Make in India policy.

However, the proposal attracted vocal criticism from the offline traders association. They said they will oppose any such move regardless of the ownership structure.

Offline traders form a big vote bank of the government.

In 2016, much to the ire of the offline traders, the government had allowed 100 percent foreign direct investment (FDI) in e-commerce firms following a marketplace model.

Going ahead with the proposal in the existing shape carried the risk of inviting more criticism.

Confederation of All India Traders (CAIT) has already announced a nationwide protest against the USD16 billion Flipkart-Walmart deal and FDI.

The merchants plan to travel across the country in the next 90 days covering 22,000 kilometers. The aim is to unite merchants against FDI and the Flipkart-Walmart deal in India.