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.
#Budget’14: e-commerce to be promoted; no approval needed for e-commerce platforms.
— Utkarsh Anand (@utkarsh_aanand) July 10, 2014
Gurusharan Das found 100% FDI in e-commerce as the biggest thing in @arunjaitley ka budget. 🙂 how much investment will come?
— Priyabrata Tripathy (@PriyabrataT) July 10, 2014
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.
Union #Budget 2014: Arun Jaitley’s announcement on FDI in e-commerce to create healthy competition, says PWC http://t.co/qY6AoXfkMi
— Hitesh Nathani (@HiteshNathani) July 10, 2014
Even some media brands started tweeting the same. The Economic Times, India’s largest business newspaper was one of them.
Arun Jaitley’s announcement on FDI in e-commerce to boost healthy competition, says PWC http://t.co/vtoLas0NcI @arunjaitley #Budget2014
— ET Retail (@ETRetail) July 10, 2014
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
#Budget2014 Need a little more clarity on FDI in e-commerce. Is it really 100% FDI in e-com or only for some products manufactured in India?
— Shyamanuja Das (@shyamanuja) July 10, 2014
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.