The Clothing Manufacturers Association of India (CMA) heartily thanked the Indian Government, especially PMO, Commerce and Textiles Ministry for implementing the much-awaited marketplace policy, which will bring level players for all domestic retailers.
The Government of India clarified the policy related to e-commerce marketplace, on 26 December 2018.
DIPP has reaffirmed its policy, restricting marketplace companies from using FDI flow for retail.
DIPP has further clarified, that marketplace operators cannot participate in pricing or inventory models through any permissible structures like B2B Wholesale, Group Company Structures etc. thus removing all ambiguities in the interpretation of the policy. Additional clarification, restricting ‘exclusive’ product deals including private labels etc., further reaffirms the policy’s intent to not allow any FDI in inventory-based e-commerce.
Rahul Mehta, President, CMAI stated through a press release that with these clarifications, marketplaces will only act as facilitators of the transaction and not be responsible for the actual product. All product sales facilitated by marketplaces will be a contract between the customer and the actual seller.
The policy has further mandated filing of statements by marketplaces, to affirm compliance of rules.
Mehta also stated that this new clarification will bring much needed level playing field for sellers on marketplaces. With complete restriction on marketplaces to participate directly in retailing, the policy will give Indian companies the opportunity to build stronger retail models and avoid channel conflicts.
He further stated that Indian companies will get the opportunity similar to the ones Chinese companies received initially, which led to building of giants like Alibaba, Tencent and JD.
Mehta has requested the Government to appoint monitoring agencies to ensure compliance to norms and initiate action against marketplaces that flout the policy.