4/26/24, 12:05 PM Reliance Retail tells govt e-commerce players bypassing foreign investment norms - The Economic Times

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Business News › Industry › Services › Retail › Reliance Retail tells govt e-commerce players bypassing foreign investment norms

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Reliance Retail tells govt e-commerce players

bypassing foreign investment norms
29
PTI Last Updated: Mar 25, 2021, 09:04:00 PM IST
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Synopsis
At the meeting, Reliance Retail's representatives said the Indian e-commerce policy
does not allow foreign capital in the inventory-based model and foreign investment is
allowed only in pure technical infrastructure/ platform that facilitates the meeting of
buyer with sellers.

Billionaire Mukesh Ambani's Reliance

Retail on Thursday told the
government that complex legal
structures have been used by some
firms to bypass the country's e-
commerce rules which from the very
beginning do not allow foreign capital Most Searched Stocks

According to sources, they alleged that these

in the inventory-based model. At a Tech Mahindra. Share Price
1291.60
marketplace entities are engaged in the control
of inventory and are their largest sellers.
meeting called by the commerce 11:06 AM | 26 Apr 2024
101.30(8.52%)
ministry on allegations that foreign
4802.35
online retailers created complex structures to bypass foreign investment rules LTIMindtree. Share Price

and damage small traders, Amazon urged the government not to issue any 11:06 AM | 26 Apr 2024
167.66(3.62%)

clarification until investigations into its business practices had been 3957.25
Divi's Laboratories. Share
concluded, sources said. Price

At the meeting, Reliance Retail's representatives said the Indian e-commerce 11:06 AM | 26 Apr 2024
113.45(2.96%)
policy does not allow foreign capital in the inventory-based model and foreign 473.40
Wipro. Share Price
investment is allowed only in pure technical infrastructure/ platform that
11:06 AM | 26 Apr 2024
12.40(2.69%)
facilitates the meeting of buyer with sellers.
8944.60
Bajaj Auto. Share Price
Such platforms cannot act as sellers themselves, directly or indirectly, they 11:06 AM | 26 Apr 2024
209.71(2.41%)
said, adding some foreign companies have used complex legal structures to
exploit loopholes or used creative interpretation of the policy that violate the Load more..

policy in spirit.

https://economictimes.indiatimes.com/industry/services/retail/reliance-retail-tells-govt-e-commerce-players-bypassing-foreign-investment-norms/a… 1/4
4/26/24, 12:05 PM Reliance Retail tells govt e-commerce players bypassing foreign investment norms - The Economic Times

Such legal creativity includes creating a multi-level company structure to hide

the real relationship between the marketplace entity and the sellers, they told
the meeting.

According to sources, they alleged that these marketplace entities are engaged
in the control of inventory and are their largest sellers.

The continued violation creates the doubts about legal sanctity of the policy
especially in the mind of new e-commerce players and so it is imperative that
the rules are clarified to an extent that these are not subject to such creative
interpretation, the officials told the meeting.

Sources said they suggested that the scope of group company be widened to
include affiliate and associate companies and misuse of B2B e-commerce by
Network with our executives
either controlling the inventory or providing deep discounts through selected Acceldata Learn More
sellers by the way of capital dumping be prevented.
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Amazon officials, on the other hand, said any clarification in the FDI policy
will entail unemployment, ridicule India's foreign investment policy and 45%
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impact consumers.

They said any claims or complaints of violation can be investigated by the

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and continuing dialogue with the government.

"We reiterated our strong, long-term commitment to India as we continue to

onboard hundreds of thousands of MSMEs, building infrastructure and
technology to empower and scale these local businesses," the spoksperson
said.

"The FDI policy needs to be stable and predictable for investor confidence as

https://economictimes.indiatimes.com/industry/services/retail/reliance-retail-tells-govt-e-commerce-players-bypassing-foreign-investment-norms/a… 2/4
4/26/24, 12:05 PM Reliance Retail tells govt e-commerce players bypassing foreign investment norms - The Economic Times

any disruption in business will impact millions of livelihoods and jobs, have
negative consequences on downstream suppliers and service providers
including MSMEs, startups and offline stores which have barely recovered
from the setback of COVID," the spokesperson added.

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4/26/24, 12:05 PM Reliance Retail tells govt e-commerce players bypassing foreign investment norms - The Economic Times

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