New Delhi: Internet and Mobile Association of India (IAMAI) on Tuesday asked for deferment of implementation of controversial Press Note 2 of the FDI policy on e-commerce sector from February 1 for a wider consultative process.
IAMAI said there are provisions in the Press Note 2 (2018) that are unclear and onerous.
According to the revised norms issued by the government last month, inventory of a vendor will be deemed to be controlled by an e-commerce marketplace entity if more than 25 per cent of purchases of such vendor are from a marketplace entity or its group companies.
IAMAI said it is not possible for online marketplaces to track or monitor all sales from any vendor given a vendor is free to sell their products across multiple online platforms and even off-line.
“Moreover, a bigger concern is when one calculates this benchmark of 25 per cent sales. If platforms realise that this benchmark of 25 per cent has been crossed, they cannot recall or cancel a transaction which has already taken place to rectify the situation," it said.
On the other hand, IAMAI said predicting this benchmark is an almost impossible task as platforms cannot have a definite measure of future sales from every vendor as it is completely dependent on the buyers’ choice. IAMAI said this provision be relooked for a better drafting that is feasible.
The revised FDI norms have also barred e-commerce companies from entering into exclusive tie-ups to sell products.
IAMAI said many small scale sellers opt for exclusive sales through online platforms as they offer warehousing, logistics and wider market access.
“Many new manufacturers prefer digital platforms to avoid high capital expenditures in developing distribution networks and marketing channels. Platforms cannot mandate sellers for exclusive agreements as no seller would accept such a term,” it said.
