DPIIT Leadership Holds Talks with Retail Giants to Seek Inputs on FDI Policy
India is actively evaluating adjustments to its foreign direct investment (FDI) rules in retail and ecommerce.
The Department for Promotion of Industry and Internal Trade (DPIIT), India’s top commerce body, recently convened a meeting with top industry people, including executives from major e-commerce and retail companies, including Reliance, Amazon, and Walmart-owned Flipkart, alongside industry groups like the Confederation of Indian Industry (CII) and the Federation of Indian Chambers of Commerce & Industry (FICCI). The purpose of the meeting was to seek detailed feedback and input on the nation’s Foreign Direct Investment (FDI) policy for the retail sector.
Discussions focused on existing rules governing single-brand and multi-brand retail, food product trading, and e-commerce, with the aim of simplifying compliance for businesses backed by foreign capital.
The central point of contention remains the inventory restriction; current regulations prohibit e-commerce companies with majority foreign ownership (like Amazon and Flipkart) from directly holding product inventory. While domestic rivals (like Reliance and Tata) are exempt from such restrictions.
This disparity has already prompted market maneuvers, such as quick commerce player Blinkit restructuring its ownership to adopt the more efficient inventory-led model. Zepto and Swiggy are exploring similar options as well.
These policy deliberations are occurring as India prepares for renewed trade negotiations with the United States (US). American officials are anticipated to pressure India to grant full access to its $125 billion e-commerce market, likely demanding the removal of these specific inventory restrictions, setting the stage for a major policy debate in Delhi.
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