Govt to formulate a policy to define business of online firms

The Department of Commerce has directed the nodal electronics and IT department to frame a policy to define business of ecommerce units, classifying them by size and scale. It will also contain set norms for the workforce and the procedures to set up shop in other countries.

There has been an ongoing debate over business model of ecommerce firms. They are also accused of violating foreign investment rules, since India does not allow foreign investment in B2C ecommerce. While leading players such as Flipkart and Snapdeal say that they only provide a platform for traders to sell their good online, industry bodies such as RAI and CAIT are of the opinion that these so called marketplaces eligible to get FDI, are actually involved in direct selling.

The new policy is expected to resolve these issues. It will define, what is an ecommerce unit and what all services they offer. Questions such as should there be foreign investment in them and if yes, then what should be the limit, will also be addressed.