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E-com marketplace policy will bring level players: CMAI

today Dec 31, 2018
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The Clothing Manufacturers Association of India (CMAI) has welcomed the clarification issued by the Department of Industrial Policy & Promotion (DIPP) related to e-commerce marketplace and said that it will bring level players for all domestic retailers. The DIPP has reaffirmed its policy of restricting marketplace companies from using FDI flow for ‘Retail’.

“DIPP has further clarified, that marketplace operators cannot participate in pricing or inventory models through any permissible structures like B2B wholesale, group company structures, etc, thus removing all ambiguities in the interpretation of the policy,” CMAI president Rahul Mehta said in a press release.

Additional clarification on restricting ‘exclusive’ product deals including private labels etc, further reaffirms the policy’s intent to not allow any FDI in ‘inventory based e-commerce’, Mehta said.

“With these clarifications, e-commerce marketplaces will only act as facilitators of the transaction and not be responsible for the actual product. All product sales facilitated by marketplaces will be a contract between the customer and the actual seller.” Mehta said.

The policy further mandates filing of statements by marketplaces, to affirm compliance of rules. “This new clarification will bring much needed level playing field for sellers on marketplaces. With complete restriction on marketplaces to participate directly in retailing, the policy will give Indian companies the opportunity to build stronger retail models and avoid channel conflicts,” he added.

According to Mehta, Indian companies will get the opportunity similar to what the Chinese companies received initially, which led to building of giants like Alibaba, Tencent and JD.

He, however, requested the government to appoint monitoring agencies to ensure compliance to norms and initiate action against marketplaces that flout the policy. 

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