Delhi High Courts asks government to consider RAI’s plea

Business

Delhi High Courts asks government to consider RAI’s plea

by Sujata Sachdeva
21 May 2015
The Delhi High Court has directed the government to consider a plea by the Retailers Association of India (RAI), before taking a call on foreign investment in ecommerce and physical retail. According to the association, the rules of FDI must be same for both.

The order has the potential to reopen policy debate on rules pertaining to foreign investment in e-commerce companies as well as multi-brand retail. Delivering the order, justice Rajiv Shakdher directed the government to consider RAI’s plea and revert with a decision within four months. The petition has asked for an equal footing between retailers and e-tailers in terms of FDI regulations introduced by the government.

RAI had expressed strong opposition to the government’s move to approach stakeholders of the ecommerce market to seek their views on FDI policy in e-commerce segment. The association feels that the retail industry must be classified on the basis of category of goods and services provided and not on the basis of brick and mortar stores or e-commerce. So the retailers decided to not participate in the stakeholders’ consultation meeting on FDI policy on e-commerce sector called by DIPP. RAI had also earlier requested the government to create a simple FDI policy for retail without segregating retail by brands and channels.

While the Indian government is in discussions with domestic and ecommerce platforms regarding FDI in online multi-brand retail, it has said that the rules remain unchanged for now. After meeting the stakeholders and hearing their point of views, Commerce and Industry Minister Nirmala Sitharaman said the government is yet to take a stand on allowing FDI in e-retail. While domestic biggies such as Flipkart and Snapdeal opposed foreign investment in B2C a meeting by commerce and industry minister Nirmala Sitharaman, foreign entrants - Amazon and eBay spoke strongly in favour of it. Around 60 players from the industry, including representatives of Amazon India, Snapdeal, Ikea, Japan Plus, eBay and Flipkart attended the meeting.