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FDI in Indian Ecommerce

Updated On:03-June-2015

Ecommerce Industry in recent time has seen a tremendous growth. The mode is considered to be fast, convenient and efficient for both users and service providers. Today the marketplace offer many options to its customers which enable them to choose the best among the given alternatives. The industry has created such a big impact that today people highly prefer to make their purchase and sales transaction via online.

Nowadays FDI in ecommerce is the major talk everywhere. So what FDI is exactly about? What happen if government allows FDI in ecommerce sector? Allowing FDI is good or bad? Foreign direct investment(FDI) is the investment made in a country by the company of another country. FDI has its own pros and cons. Employing FDI boost our economy, generate employment opportunity, business opportunities, foreign capital and helps in getting new technologies, management skills and increase tax revenues.

On the other side allowing FDI will increase competition. Indian retail sector highly depends on small shops and departmental stores and if FDI comes into retail then these shopkeepers and vendors get fear that they can’t compete with these multinational companies as a result they will be unemployed and lose their ownership. FDI is good to some extent but allowing 100% is not advisable.

If FDI is allowed in Indian ecommerce then the foreign investors may take the ownership and rule over the Indian ecommerce market. Some percentage of FDI is fine but allowing FDI completely will seriously impair small retailers. They will concentrate only on their profits and will exploit our natural resources by manufacturing activities. So we won’t derive much benefit than their tax revenue. If Indian companies establish themselves then they derive the ownership and their progress will directly have an impact on our economy unlike the case with FDI.