Foreign Direct Investment in ecommerce segment

What is FDI?

In general, the investment made by the company of one country in another country is called FDI. With such investment, investors get some share in the management of another country in which the money is found. It is assumed that at least the company has to buy 10 percent of the shares in the company to get FDI status for investment. Along with this, the company has to get the franchise in the investment company.

Growth of E-commerce in India

As per recent reports from IMF and CSO India is among fasted growing markets for e-commerce. There are several factors for this, few to mention are niche company’s participation in online commerce, Foreign players investment in local companies and Introduction of Uniform tax GST. In 16-17 financial year, the sales of e-commerce touched approximately 15billion as per Morgan Stanly also it is estimated that the value will be increased to $120 billion by 2020.

Online retail in India is estimated to grow over 1,200% to $200 billion (Rs13,30,550 crore) by 2026, up from $15 billion in 2016, according to a recent report by financial services firm Morgan Stanley. By then, online retail will account for 12% of India’s overall retail market, from just 2% last year. Source

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Today, only around 14% of India’s internet users shop online, compared with almost 64% in China, according to Morgan Stanley. But that is likely to change as people become more comfortable with making transactions on the web. Source

Advantages & Disadvantages:

1. So far, with so many international players are investing in Indian corporations to get their piece and Indian entrepreneurs have also been taking advantage of the e-commerce policy loopholes.
2. In fact, websites like Amazon India, Flipkart, Snapdeal and PayTm which is providing the good platform for thousands of sellers to sell their products in online marketplace.
3. Economists believe that with new government policies on FDI will bring foreign investment into the country and will benefit the consumers and countries economy.
4. Many incidents happened in the past may hackers are using loopholes in the system to cheat people in areas like service, payment gateways, etc.
5. Online stores are providing big discounts where small vendors cannot offer over the period when these local vendors are out of business, and these e-commerce companies become monopolies and increase the rates as they want.

Conclusion:

Increasing employment opportunities in e-commerce are becoming an important part of the country's economy. The people of the country are showing the keen interest in purchasing mobile phones, grocery items, readymade garments and other goods and services through online. On an average 5-6 lakh, online transactions are happening every day. Under e-commerce, the manufacturers and wholesale dealers collaborate and do businesses directly with the consumers. Online shopping saves a lot of time and money to customers and sellers and it also helps to develop country’s make life more comfortable.