Suresh Prabhu: “no confusion” on FDI policy
today Jan 11, 2019
The Minister of Commerce Suresh Prabhu assured that there is “no confusion” around the new foreign direct investment (FDI) policy and that the government is not trying to tell e-commerce companies how to do business.
In an interview with ET Now, Prabhu stated that the Department for Industrial Policy and Promotion’s (DIPP’s) e-commerce policy clarification, published at the end of last year, is “very clear”. A number of foreign-owned multi-brand e-commerce retailers have questioned what the policy means for their businesses, especially for private label fashion brands, but Prabhu maintained that “there is absolutely no confusion.”
“It was decided that single brand retail will be allowed,” Prabhu told ET Now. “Multibrand retail further will not be allowed. How do you define single brand retail was an issue. It was already clarified whether an inventory-based model or non-inventory based model. All those issues are there.”
Prabhu also stated that the policy clarification is designed to increase transparency in the sector. Talking about foreign businesses, Prabhu said: “We are trying to make it as simple as possible, as transparent as possible, as participatory as possible and we are saying that whoever wants to come in, is most welcome and will be guided by a staple policy framework.”
Speaking about whether or not international businesses will have to change how they operate in India, Prabhu said: “It is absolutely up to them to decide on their business model.”
Although the policy appears to limit the channels in which FDI can enter Indian online retail, Prabhu claimed that the government conversely wants to increase FDI from the current total of $61.85 billion (Rs 4.1 lakh crore) to $100 billion.
“We are for FDI entering India,” said Prabhu.
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