At a time when seller associations across the country are rallying for a new ecommerce policy and a regulatory authority for the sector, the government has proposed to create a special group to check if the Amazons and Flipkarts of the country are violating the foreign investment policy.
According to report in the Economic Times, the government is also looking to widen its definition of ecommerce under the framework.
The broader ecommerce definition will include any buying, selling, distribution and delivery of goods and services online.
The suggestions were made at the task force meeting that was held on Saturday. These will then be submitted to the think tank.
There will be a separate wing that will comprise officials from the industry department and ED to handle violations and enforce guidelines. ET reports that this wing will also handle any ‘grievance relation to the implementation of Press Note 3, which details the guidelines for foreign investment in ecommerce. This special group is being seen as a temporary fix to look into policy misuse while the government looks to put in place a single legislation for the ecommerce industry.
Sellers and small retailers have been up in arms against the ecommerce companies and allege that ambiguity in guidelines around foreign investment guidelines are helping ecommerce companies work around the restrictions. There have been several allegations time and again with regards to price influencing, high discounts and how these actions violate regulations. However, ET reports that Amazon India and Flipkart claim to be complying with laws.
Interestingly, ever since US retail giant Walmart announced the acquisition of 77% stake in Flipkart, retailers and seller associations have been strongly opposing the deal claiming that it violates FDI norms and also will eventually hurt domestic sellers.
Taking all suggestions into consideration, a cabinet note will be prepared. The point is to remove all ambiguity and put in place an ecommerce policy and define ecommerce at par with the international definition.