The Smarter way to get your business news – Subscribe to BloombergQuint on WhatsApp
In a magical move, the Indian government has both outlawed private label sales by e-commerce platforms and said private label sales are not restricted.
Yes, India’s foreign direct investment policy for retail has, for many years, spoken in two tongues. And complying with it is like playing Snakes and Ladders. Chances are today’s policy changes may take you close to the top and tomorrow’s press note may drop you in the jaws of death.
Mostly because FDI policy in India is caught in this self-serving downward spiral of trying to protect voter bases and domestic incumbents while also trying to attract foreign investment.
Nothing wrong with that if all interests were balanced in a transparent, consistent manner.
- 2013: First, India allowed 100 percent FDI in single-brand retail but didn’t allow the same retailers to sell their goods online.
- 2014: Then it allowed 51 percent FDI in multi-brand retail but a government change ensured that remained a policy only on paper.
- 2016: The new NDA government then allowed 100 percent FDI only in e-commerce marketplace sites, shutting the door on inventory-based models but leaving a window open for line-blurring elements like private label sales. (Private labels are goods sold under the retailer’s brand.)
- 2018: Last week the government issued a new rule to shut the window on private labels but kept the vents open.
- 2019: And on Thursday, the government issued a clarification that said that private labels sales are not banned.
. Read more on Opinion by BloombergQuint.
Source: Global Economy