Hotline: 1800 102 2007
Hotline: 1800 102 2007
Search Business Opportunities
MSMEs 2019-01-02

Will the new FDI policy Hamper job Creation or Provide Opportunities for MSMEs?

Many e-commerce players and MSMEs are confused about whether the policy is going to work in their favor or not, which is why they are demanding clarity from the government. Read on...

By Senior Sub-editor
Will the new FDI policy Hamper job Creation or Provide Opportunities for MSMEs?

With the New Year here, new beginnings are being forecasted in the business world. However, the FDI policy has left many e-commerce players confused, with some unhappy and some happy faces.

The new policy says that "an entity having equity participation by e-commerce marketplace entity or its group companies, or having control on its inventory by e-commerce marketplace entity or its group companies, will not be permitted to sell its products on the platform run by such marketplace entity".

Effect on Job Creation Opportunities

E-commerce giants like Flipkart and Amazon have shown thumbs down to the new policy stating that it will hamper the number of job opportunities they create in the small towns and cities.

According to published reports, Pinakiranjan Mishra, Partner and National Leader at Retail and Consumer Products at EY, said he did not see how the policy could directly affect contractual jobs at e-commerce firms unless they caused a slowdown in the growth of these businesses.

“As a consumer, you buy a product because you like the product and the price. Demand is not related to government policy. The only way it could go down is if the discounting changes and the price become higher,” said Mishra.

Effect on MSMEs

Some e-commerce players see this as an opportunity for the MSMEs to put their products and prices accordingly, while not being forced to offer discounts as per the e-commerce giants.

This is also seen as an opportunity to move over from under the umbrella of the big players and build their own brands.

AnkurPahwa, Partner and National Leader – E-Commerce and Consumer Internet, EY India said, “The new policy will help re-imagine the already intricate supply chain that exists for e-commerce players – ownership vs franchising vs B2B2C are clearly aspects that most players will adequately consider and implement, but the key element for the policy has to be to make sure that ecosystem, especially the consumers, are not negatively impacted; be it for products choice, pricing or service quality.”

Ankur added, “While certainly a level playing field and supporting MSMEs is the intention of the law and trader bodies, pricing, discounts, private label mix etc are equally relevant in brick and mortar multi-brand retail businesses as they are for e-commerce companies. So,it will certainly be interesting if we see similar stringency being applied there as well, especially if the intention of this is to protect small vendors and suppliers, who would be seeing the same impact irrespective of online or offline.”

Clouds of Confusion

Many e-commerce players and MSMEs are confused about whether the policy is going to work in their favor or not, which is why they are demanding clarity from the government.

Ankur adds, “There is certainly greater clarity needed on some of the key definitions/aspects within the proposed law, be it with respect to control and consistency of it between various laws, parameters to meet the 25% limit, including when independent MSME who only sell their products online and who breach this 25% limit, among other aspects.”

Comment
image
image
mobile
address
star franchise india
Related opportunities
  • Department & Convenience Stores
    About Us: AMPM Convenience Stores are India’s organised retail chain in..
    Locations looking for expansion Haryana
    Establishment year 2018
    Franchising Launch Date 2018
    Investment size Rs. 50lac - 1 Cr.
    Space required 1500
    Franchise Outlets -NA-
    Franchise Type Unit
    Headquater Karnal Haryana
  • Education Supplies
    About Us: Siddshree Publication is a privately held company, dedicated to..
    Locations looking for expansion Delhi
    Establishment year 2017
    Franchising Launch Date 2019
    Investment size Rs. 50000 - 2lac
    Space required -NA-
    Franchise Outlets -NA-
    Franchise Type Unit
    Headquater New delhi Delhi
  • About Us: Partner with Cafe Frespresso and be part of fastest..
    Locations looking for expansion Gujarat
    Establishment year 2010
    Franchising Launch Date 2010
    Investment size Rs. 10lac - 20lac
    Space required 100
    Franchise Outlets -NA-
    Franchise Type Unit, Multiunit
    Headquater vapi Gujarat
  • Fine Dine Restaurants
    About Us: Being a part of the catering industry for over..
    Locations looking for expansion Delhi
    Establishment year 2012
    Franchising Launch Date 2018
    Investment size Rs. 10lac - 20lac
    Space required 500
    Franchise Outlets -NA-
    Franchise Type Unit
    Headquater New delhi Delhi
Insta-Subscribe to
The Franchising World
Magazine
tfw-80x109
For hassle free instant subscription, just give your number and email id and our customer care agent will get in touch with you
email
mobile
OR Click here to Subscribe Online
Daily Updates
Submit your email address to receive the latest updates on news & host of opportunities
More Stories

Free Advice - Ask Our Experts

pincode
ads ads ads ads