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DNA Speak up: Readers from Pune talk about the Centre's proposal to remove restrictions on foreign online retailers

Friday, 6 June 2014 - 10:12am IST | Place: Pune | Agency: dna

Global online retailers like Amazon and eBay are banned from selling products they source themselves. The Centre proposes to remove these restrictions which may result in elimination of middlemen. dna asks readers if this new move will benefit them

Online retailers not only sell products but also service...

The opening up of the online retail business for Foreign Direct Investment (FDI) will definitely boost competition. It will not necessarily eliminate middlemen because some foreign online retailers may prefer to deal with middlemen as they have local market knowledge. FDI will also help some local online retailer who have expertise but don’t have funds. Once the global online retailers can start selling self-sourced products, the customer will be benefited by getting better quality product options. The third-party suppliers can also then develop expertise in sourcing unique Indian products for which the global retail giants may offer tremendous demand opportunity. The global online retailers have mastered the art and science of providing best service.

Sachin Mohan Bhide, Marketing Consultant


Like us, they are not burdened by taxes...
If the central government is thinking of allowing FDI in the online sector, it will be wrong and directly affect the small traders and shopkeepers. They are under immense pressure of taxation like LBT and not doing well with immense competition from malls and big retail chains. Allowing FDI in online retail sector will definitely affect us and we will protest if such a decision is taken. These online retailers are not burdened with taxes and overhead costs, whereas we have to go through all the other expenses. We can’t compete with online prices. Who will buy from us, if products are available online at more than 30% discount and facilities like home delivery and cash on delivery? It will be an unhealthy competition for us which will not last for long. 
— Popatlal Ostwal, President, Federation of Traders Association of Pune (FTAP) 

Indian economy will benefit by removing the restrictions...
Small traders feel that the new government will have less control as MNCs will monopolise and take bigger share of markets as well as margins. On other side the e-commerce business will open doors to online retailers like Amazon, eBay, who have been selling their merchandise through third party. The online retail sector would revive the economy that has grown below 5% in the last two years. This may help the small traders to reach larger markets, increase employment opportunities, use local skill. It would contribute up to 4% to India’s economy by 2020 from under 1% now. It will allow online retail giants like Amazon or eBay to partner with local manufacturers in sourcing products at lower prices given the Indian consumers unique and wide choice.
—Prashant Pansare, Vice Chairman, Indo American Chambers of Commerce

Central govt must think before hurting the regular traders...
It is contradictory that on one side the government might take back the decision to bring in foreign direct investment in the retail sector and on other, they are proposing to bring it for online retail. Online retailing is no different from general retailing. When its same, why should there be different rules for them and different for shopkeepers and traders. Regular shopkeepers have to bear various overhead expenses, including the place, taxes, staff and these online retailers hardly have any overhead expenses or don’t have to pay LBT taxes.. It will prove disastrous for small time Indian traders and shopkeepers. 
—Suryakant Pathak, Executive Director, Grahak Peth 

The new govt needs breathing space to take big decisions...
There’s pressure on the new government of schemes initiated by the previous government. FDI in retail is sure to follow.
Regular retail segment is labour intensive, whereas the online retailing is capital intensive. So when the government is opening up for online retailing and lifting restrictions, it will not only turn out to be a market issue, but also a social issue. Those going outof business due to online retail, where will they be placed. Though on one side we are talking about consumer benefit, we are going to face social disparity. The government has to balance things so that there wont be price disparity .
—Anil Bokil, Economics Analyst

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