The economic wing of Rashtriya Swyamasevak Sangh (RSS) has requested the Indian government to ban foreign ecommerce companies such as eBay, Amazon and Indian ecommerce giant Flipkart. According to them, these foreign firms are killing the domestic players in the Indian market.
The RSS is not only seeking the banning of foreign ecommerce firms, but also of the Indian e-tailers such as Flipkart which have a high percentage of foreign fund infusion in their companies. They think such ventures pose a great threat to Prime Minister Narendra Modi's much ambitious 'Make in India' scheme.
The leaders of the Swadeshi Jagran Manch (SJM) are extremely unhappy with the current government's overall foreign direct investment (FDI) policy. They even met Arun Jaitely, the Union Finance Minister, earlier this month regarding the same. The SJM leaders had a long discussion with the Finance Minster regarding the budget and even sought a white paper on FDI.
“We are of the opinion that FDI in e-commerce should be prohibited by law. Though we do not allow FDI in e-commerce sites, they circumvent the law to sell their product in the country. Even Indian e-commerce firms like Flipkart have turned to be foreign now with funding from outside. There is a lacuna in the law and this cannot be allowed. We have asked the Finance Minister to plug loopholes in the law,” said, SJM national convener in a statement to The Indian Express.
According to the data received from Venture Intelligence, a research service focused on venture capital and private equity in India, $273 million were invested in the Indian e-commerce ventures in 2012, $540 million in the year 2013 and $240 million through April 2014.
According to Motilal Oswal Securities, November 2014 report on ecommerce in India, the $11 billion ecommerce market in the country is expected to grow by 37 percent and reach $20 billion by the end of this year.
The Indian laws do not allow FDI in ecommerce sites that sells products directly to the customers, but it does allow FDI in market places that link buyers and sellers.
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