- Posted September 28, 2013 by
Indian Prime Minister Singh’s U.S visit - Focus on FDI in e-commerce
Despite ongoing turmoil in the Middle East, the Obama administration continues its steady pursuit of a foreign policy makeover, reorienting its attention and resources to the Asia-Pacific—specifically India. Following a number of high-level visits by American officials to India, including Vice President Joe Biden’s trip in July and Secretary of State John Kerry’s trip in June, Indian Prime Minister Manmohan Singh met with President Barack Obama during his second official trip to Washington as prime minister.
During the meeting, President Obama and Prime Minister Singh focused on the following six issues in the U.S.-India relationship:
- Trade and investment
- Defense cooperation
- The U.S.-India civil nuclear deal
- Climate change and clean energy
- Immigration reform
- Security issues and the strategic partnership
Indian Prime Minister, Prime MinisterManmohan Singh on his current excursion to America, could talk about foreign investments in indian e-commerce sector. He is scheduled to meet President Obama and will address the United Nations Assembly. The officials in India are framing a proposal that allows 51% FDI in e-commerce ventures. This move will help in generating a level with FDI permitted in multi-brand retailing.
The level of progress made by the Indian government, in this regard, would have surely helped Mr. Manmohan Singh when he held discussions with top officials of American companies. Department of Industrial Policy and Promotion has conducted a study in order to have a better understanding of the industry, prior to moving a proposal. One of the officials of DIPP said that they are getting the documents ready for the e-commerce sector. On the basis of these documents, they will make efforts to formulate a policy to allow overseas investment in the sector.
Over the past two decades, the Indian economy seemed unstoppable. U.S. and global companies looked to the country’s fast-growing population for new consumers, its bulging youth workforce for new labor, and its skyrocketing economic growth for investment and trade opportunities.Policymakers from both countries have engaged in conversations discussing the details of the treaty in anticipation of Prime Minister Singh’s U.S visit, and Indian officials have recently indicated that they may be willing to sign the treaty if Indian courts are given jurisdiction over cases that arise.
The Obama administration will also continue to make its case that the Indian government should address U.S. companies’ concerns related to local content rules, foreign direct investment restrictions, and intellectual property, among other issues.Last year, the government did give a green signal to FDI in multi-brand retail, but at the same they clarified that this is not for the e-commerce sector. However, 100% FDI is permitted in B2B and e-commerce via automatic method. Nasscom has already discussed different aspects with DIPP, which advocated foreign direct investment in the e-commerce sector to support Indian ventures.
"As e-shopping is becoming more and more widespread, so the sales volume of online mall's & stores becomes much higher when compared to brick-and-mortar stores. The primary objective below is to reflect the growing eCommerce trend and its impact on the business. Constant innovation and customization of your website will diversify your trade." said Mr.K.Bhatia, Founder of DietKart, India's leading Online Shopping Mall.
While the volume of online retail is growing by leaps and bounds, on a small base, with the majority of the companies still in their initial stages as they concentrate on user achievement. With not many companies able to maintain the much needed burn rates, some have either shut down or have been acquired. Amazon has outlined the way they want to operate, if FDI gets a nod. They will have deliveries in states and UTs that are open to foreign direct investment in multi-brand retail at present 12.
Foreign online retailers are eager to enter India because of the potential that the country has. The e-commerce industry in India has grown from $2.6 billion in 2009 to $6.3 billion in 2011 and further growing to $14 billion in 2012. As per a survey, there are 10 million online shoppers in India and the best part is that the number is growing at an impressive rate of 30%.