Quote from Co-Founder and Managing Director of ShopYourWorld Sandip Shah on FDI in ecommerce:
The proposal of the recently-elected Modi Government to allow foreign direct investments in India from the coming month has faced mixed reactions. This move is a double edged sword, really. While it provides a dynamic retail environment propelling manufacturing and keeping the economy thriving, it could also lead to a lot of monopoly by large companies who can now enter into the country to pitch base.
Till date, India did not let global players operate within the country unless they set up a playing field where Indian suppliers could sell through their portals while they handle merely the logistics. This is a phenomenon quite common in the e-commerce business with Amazon, eBay and other large operators thriving on this kind of marketplace businesses. With the introduction of FDI in ecommerce, these companies can freely begin their operations.
While this may keep our retail sector active, it could also mean a plunge in sales for up-and-coming etailers whose niche operations get affected. This would also throw the doors open for Walmart and other retail chains who have been knocking to enter the country and begin their business. All said and done, it is a bold move by the Modi government whose repercussions shall be known in due time.