Government has allowed FDI on E Commerce to 100% and also has set some guidelines for it. BJP Government that once opposed the very idea of FDI has now opened up. But FDI on E-Commerce is not as fairy as you may consider. It may have many roadblocks for the major player of the e-commerce industry and for the shoppers as well. But before you realize it, you must understand the FDI guidelines.
FDI on E Commerce – Where it is Applied
The FDI has been allowed only for the marketplace not for the inventory based services. Marketplace is all the major e-retail sites where the products are sold from various vendors. This is basically a platform to interact with the seller and buyer. Inventory shops are those which sell their own products. They are out of FDI ranges now. The FDI has now included the big e-commerce power houses like Flipkart, Amazon and Snapdeal under this.
FDI on E-Commerce Guidelines
Few guidelines can really harm the e-retail shops and the shoppers. As per the new policy, each company has to take products from many vendors. Interestingly, only 25% cap is possible for a single vendor. Also, the E-Commerce companies cannot influence the price of the products. Flipkart and Amazon both sell their products and it is believed that the percentage would be more than 25%. This is a major worry for the big E-Commerce portal. However, this decision has brought smiles for Snapdeal as they are not as big as these two and can earn some benefits out of it.
Why Consumers should be worried
The most worried part of the FDI on E Commerce is that the well known discounts of the sites may become history. The rise of the E-Commerce was prominent because of the incredible discount but as the portals can’t really influence the price now, experts believe consumers will end up on the sufferer side.