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Flipkart, Snapdeal Oppose 100% FDI in India’s E-Commerce Sector

fdi in ecommerce

The debate around FDI (foreign direct investment) refuses to settle down and this time it has entered the e-commerce domain.

According to rumours doing the round, both the e-commerce portals and the brick & mortar retailers have been having contrasting views on the idea of FDI in the e-commerce space.Not only this, in order to garner the maximum profits, the two entities are also debating on the fact that who can be tagged as a marketplace.

Amazon, Snapdeal and Flipkart function as a marketplace in India as these e-commerce platforms allow any retailer to sell goods on their platforms. On the other hand, companies such as Reliance Retail, Shoppers stop are considered as closed marketplaces since they only choose to work with a selected few vendors.

Among the huge number of e-commerce portals, only Amazon India seems to be openly endorsing the cause of FDI in Online retail.

Recently, Retailers Association of India (RAI), a lobby organization for big companies such as Future Group and Reliance Retail has asked has asked the government clarification regarding what constitutes a marketplace.

They are also seeking a status equal to their online rivals, as many of the offline retailers have shown interest in opening their own online stores.

Many of these online retailers are in favor of 100 percent FDI in the e-commerce sector but this is being opposed by some of the big names of the online marketplace such as Snapdeal and Flipkart.

On the other hand traditional retailers seem to have agreed on a united stance on the issue. "A lot of our members are either already running or want to open online channels and get access to foreign capital. This ambiguity on 'retail marketplaces' creates a sense of risk," said Kumar Rajagopalan, chief executive, RAI, in a statement to the Business Insider.

According to e-commerce firms, they will end up losing a major share of market if such policies are initiated.

The government is hearing all the stances on the issue before preparing its final policy.

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