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Government won't change FDI rules for e-commerce, says Commerce Minister Piyush Goyal

The minister has said the RoDTEP rates involving 11,000 export items will soon be announced. The government is also keen on launching its national single window portal for industry clearances and approvals.

July 02, 2021 / 06:50 PM IST
Representational Image.

Representational Image.

The government will not be changing the current policy of Foreign Direct Investment in the e-commerce sector, Commerce and Industry Minister Piyush Goyal has said.

"I want to make it clear that we won't be changing any policy on e-commerce for FDI. The policy has been crystal clear since it was announced. But certain allegations of policy not being followed have reached us. We will be addressing that shortly," Goyal said on July 2, while addressing a press conference on the achievements of the ministry on July 2.

The minister's statement comes a few days after he criticised "US-based companies" for violating Indian laws. The government has increasingly clashed with major digital players in the e-commerce sector, with the minister recently also saying that foreign e-commerce companies pose risks to the livelihood of millions of people.

The present policy allows 100 percent FDI in the marketplace-based model of e-commerce, prohibiting the inventory-based model of e-commerce. The government has brought out multiple press notes and notifications to ban e-marketplaces from owning the inventory they sell and stop them from showcasing products by entities in which they have equity participation.

With regards to when the final e-commerce policy will be announced, Goyal said that the government have recently announced e-commerce rules under the consumer protection act. The rules are open for public discussions till July 6, he said.

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"This is a series involving consumer affairs, FDI and e-commerce. We wanted to come out with the consumer protection rules first because we believe our most important stakeholder is the consumer. We wanted to make sure that consumer protection prevails over everything else," Goyal said.

Export growth

The government is confident of achieving $400 billion in export of merchandise goods in FY22, Goyal said. "The highest ever exports have been registered in the first quarter(Apr-Jun) of FY22, coming in at $95 billion, despite the severity of the second wave. This was 16 percent higher than the $82 billion worth of exports in 2018-19," the minister noted.

In the immediately preceding quarter, January-March of FY21, exports stood at $90 billion. The first quarter of FY22 has seen double-digit growth in the export of spice and oil meals, positive growth in rice and marine products. Engineering goods have also risen $5.2 billion over the period.

"Ten out of the 30 commodity groups tracked by the government has shown a rise in Q1 of FY22 as compared to before the pandemic in FY20," BVR Subrahmanyam, the new commerce secretary said. He added that India's export growth rate in April 2021 vastly surpassed that of the United States, the United Kingdom, the European Union, Japan and South Korea. The government has however not mentioned China.

"We will very soon be coming out with the details of rates," Goyal said with regards to the announced but yet unimplemented Remission of Duties and Taxes on Exported Products (RoDTEP) scheme.

"RoDTEP was a colossal task involving 11,000 items, which needed to be studied, understood what taxes needed to be refunded. Many were state taxes and collected at the state level but the Centre is now taking the proactive decision to refund state taxes. We should be exporting goods and services, not taxes," Goyal said. RoDTEP was allowed nearly 2 years back and has gone live since 1 January 2021.

Goyal warned that RoDTEP was not a subsidy, but only a refund of taxes. "All subsidies exporters were getting earlier, won't be there now. We firmly industry can now stand on it's own feet," he said.

The minister also flagged the resilience of India's services exports throughout pandemic-ridden FY21, when services exports achieved 97 percent of their total export earnings in FY20. Goyal said he has directed Nasscom, the premier industry body of the tech industry in India, to target $500 billion of exports by 2025.

Business and investments

The ministry's ambitious Investment Clearance Cell is set to be launched in a few weeks' time while the pre-launch version is undergoing extensive testing for a soft launch.

"As many as 14 states have already come on board the Cell which adopts a single-window system to obtain clearances and approvals," Department for Promotion of Industry and Internal Trade Secretary Giridhar Aramane said. The government had earlier planned to launch it by April.

Aramane added that the ministry's efforts towards reduction of compliances and licensing procedures currently stood at 60 percent, but was expected to soon rise, hopefully before the next ease of doing business index survey will be undertaken by the World Bank.

Goyal said the government was looking to further simplify the Special Economic Zone ecosystem. "Every SEZ has been made multi-product. But We have to keep in mind that advantages being given to SEZ don't result in disadvantages to other industries. Discussions on that note are currently ongoing with the Revenue Department," he said.
Subhayan Chakraborty

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