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No plans to introduce FDI in e-commerce retail: Sitharaman

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New Delhi The government has no plans to bring in foreign direct investment (FDI) in e-commerce retail, parliament was informed on Wednesday.

Nirmala Sitharaman Spokesperson 11, Ashoka Road, New Delhi - 110001.

“No such proposal is under the consideration of the government,” Commerce and  Industry Minister Nirmala Sitharaman said in a written reply in the Rajya Sabha on  whether the government plans to introduce FDI in e-commerce retail.

“The term ‘e-commerce retail’ has not been defined in the extant FDI policy. However,  as per the extant FDI policy, e-commerce activities refer to the activity of buying and  selling by a company through the e-commerce platform,” she added.

Ealier this month, Sitharaman met with industry and states’ representatives on opening  up the e-commerce sector to FDI.

It was agreed then that the states would give their views on the matter within 15 days.

“The government of India invited states to discuss the issue of FDI in e-commerce in B2B and B2C and also bringing in the FDI in multi-brand retail,” Haryana Finance Minister Captain Abhimanyu told reporters after the meeting.

“But one consensus between the states and the Centre was that whatever decision is taken, it must be taken after good deliberation and after engagement with stakeholders at the state level and after assuring ourselves that the interests of the consumers, small retailers as well as Small and Medium-sized Enterprises sector are protected,” he said.

India allows 100 percent FDI in business-to-business (B2B) e-commerce, but not in B2C companies selling directly to consumers.

Describing India as an “e-commerce dumping ground”, the Confederation of All India Traders (CAIT), in a letter to the chief ministers, has said that “the Indian government has an anti-dumping policy with a clear mandate to protect domestic trade and industry from such unfair trade practices”.

Dumping occurs when prices are artificially lowered by accessing funds from overseas sources, government or otherwise.

“Under the umbrella of e-commerce business in India, the e-retailers are selling products much below the actual price of the manufacturer. This is possible only because of funding received from overseas and is nothing but e-commerce dumping,” the traders’ association said.

Jammu and Kashmir Industries Minister Chander Prakash told reporters after last week’s meeting: “We have to be careful while introducing FDI in e-commerce”.

Some states, including Tamil Nadu, are opposed to FDI in retail and e-commerce.

“CAIT urged the government not to turn the Indian retail market into an e-commerce dumping yard by allowing FDI in e-commerce,” its secretary general Praveen Khandelwal told IANS.

The Retailers Association of India, representing large brick-and-mortar retail companies, moved the Delhi High Court in May seeking a level playing field between online and offline retailers.

IANS

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5 Tips for Launching an E-Commerce Store

Get the rest of your affairs in order and do enough research before proceeding.

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E-commerce
It’s important to know how the system as a whole works. Flickr

Launching your own e-commerce store is easier than ever nowadays, and even though the market has become quite crowded, there are still plenty of opportunities that one can take advantage of. It’s important to know how the system as a whole works and what issues to be on the lookout for. You also need to be prepared to take a hit financially if things don’t work out.

  • The Right Balance in Niche Competitiveness

Perhaps the most important question you’ll need to answer in the beginning is what niche you want to work in. There are tons of options in this regard, and new ones keep popping up on a regular basis. There are advantages and disadvantages to both ends of the spectrum that you should consider. Being in a highly competitive niche means that you’ll have lots of potential customers and a lot of references to get inspiration from, but it also means more stores competing for the same chunk of the market. On the other hand, choosing a less popular niche may be a slower, but steadier option.

E-Commerce
There are lots of those on the market today, and many of the popular ones are really easy to set up and get running.

 

  • Use an Established System

Unless you have a very good reason not to, you should always go with a pre-made e-commerce system. There are lots of those on the market today, and many of the popular ones are really easy to set up and get running. You’ll just need to worry about your inventory and promotion, instead of having to deal with security, payments, layout and a huge number of other issues.

  • Promote Constantly

People aren’t just going to come to your site randomly, you need to guide them there. Invest enough in constant, ongoing promotion and ensure that it hits the right targets. It’ easy to waste a lot of money on marketing that does nothing in the long run, and without analyzing your results and doing enough research, you’ll never know if that’s not the case for your own business. Whatever you do though, don’t stop experimenting until you’ve found a formula that works.

 E-Commerce
You should also be prepared to face some failure in E-commerce. Flickr
  • Control Your Money Wisely

This might seem like an obvious one, but it’s common to see entrepreneurs in this field spending all of their funding on various things that don’t make sense. Or, alternatively, not knowing how to acquire additional funding when they need it. If you qualify for a business loan, it can make a huge difference if you’re in a situation where additional investment can boost your business significantly. There are many ways to ensure that you’re utilizing your financial potential to its fullest, so make sure that you look around the market regularly, not just when you need the money.

  • Reward Loyal Customers

Loyalty programs will never go out of style for a number of reasons, and it’s a good idea to look into them if you want to maximize the potential of your e-commerce business. It will make people more inclined to come back to you and shop again, it will improve satisfaction rates, and it will also give you some extra data to work with for your analytics. All in all, it’s a great move that can improve the state of your business significantly, and it doesn’t take a lot of effort to implement either.

You should also be prepared to face some failure, especially if you’re going into a riskier niche that has more competition. If you can’t afford to see your business closing down, then perhaps it’s not the right time to be starting something like that in the first place, so get the rest of your affairs in order and do enough research before proceeding.