Business Today - - THE BUZZ - – Ra­jeev Dubey

THE SHOCK and awe ef­fect of the Press Note on FDI in e-com­merce by the De­part­ment of In­dus­trial Pol­icy and Pro­mo­tion (DIPP) has truly stunned the e-tail in­dus­try. It was the large play­ers in the sec­tor who had got so used to the gov­ern­ment look­ing the other way, who never saw it com­ing. From the very be­gin­ning, the FDI in e-com­merce law per­mit­ted for­eign in­vest­ment only in e-com­merce plat­forms, not in in­ven­tory-based e-tail. Yet ev­ery plat­form found a way around the law by set­ting up sep­a­rate com­pa­nies to hold in­ven­to­ries and in­flu­ence pric­ing. And suc­ces­sive gov­ern­ments over­looked it. Fi­nally, the Press Note said it in black and white. It’s a huge dis­rup­tion for those caught un­pre­pared for com­pli­ance; but will surely level the field for brick and mor­tar play­ers. Just how the gov­ern­ment would like to ap­pease them.

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