DIPP defends Centre's FDI policy

The Department of Industrial Policy and Promotion (DIPP) has defended the foreign direct investment (FDI) policy in the Delhi High Court by taking recourse to Supreme Court’s rulings in the last few decades. DIPP urged the court to dismiss a petition filed by traditional retailers alleging that online retailers had violated the e-commerce FDI policy.

DIPP told the High Court that the ‘marketplace’ model which is used by e-tailers such as Flipkart, Amazon India and Snapdeal is not recognised in its FDI policy. And if the policy is violated, then it would be dealt with severely by the Enforcement Directorate under the Foreign Exchange Management Act 1999. The petition had been filed by All India Footwear Manufactures and Retailers Association’s (AIFWMRA). DIPP highlighted that the FDI policy is reviewed regularly and changes are made from time to time to ensure that India remains an attractive investment destination.

The government first allowed FDI in e-commerce for B2B based on certain conditions in 2000. Retail trading was, however, kept out of FDI.