Tag Archives: Manufacturing

FDI in E-commerce: The welcome decision that wasn’t

As soon as the Finance Minister said something about e-commerce in his maiden Budget speech, the social media was abuzz with discussion about FDI in e-commerce being allowed. In Twitter, the tone was celebratory, with many complimenting the FM and PM Narendra Modi for this revolutionary decision. Some even started discussing what it means.

What added to the confusion is that PwC actually issued a statement welcoming the decision to allow FDI in e-commerce. And that was quoted by many in Twitter.

Even some media brands started tweeting the same. The Economic Times, India’s largest business newspaper was one of them.

In fact, ET actually did a story quoting PwC. All these were unfounded and just shows not just how social media behaves but how the respected media brands, in order to be the first with the story, compromise severely on fact-checking. Now, this is what the FM said.

FDI in the manufacturing sector is today on the automatic route. The manufacturing units will be allowed to sell its products through retail including E-commerce platforms without any additional approval.

It is very clear. Isn’t it? “The manufacturing units” will be allowed to sell “their” (ignore FM’s speechwriter’s grammar for a while) products through retail including e-commerce platforms. I could not listen to the speech properly but cautioned against some premature celebration

So, for sure, there is no implications for either the Amazons or the Flipkarts.

Does it mean it is a useless statement with no implications for anyone practically? That seems to be the tone of the despaired tweeple after they realized this.

But  even that is a misinterpretation. The companies that will surely benefit from this will be those foreign companies that manufacture in India.

Dell, which used to sell directly online before the new regulations came into force (now it sells through a partner), can start selling again directly through online channel. So can Lenovo. And Nokia. And Samsung. And many more product companies that already manufacture in India.

Will some of them start selling directly? Let’s wait and see.

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