USIBC pitches for FDS in e-commerce, foreign ownership in realty

USIBC pitches for FDS in e-commerce, foreign ownership in realty Washington: Post reforms in multi-brand retail, the US India Business Council has asked the Union Finance Minister P Chidambaram to lift current restrictions in foreign direct sales (FDS) to Indian consumers via e-commerce and allow foreign companies to acquire direct ownership in real estate for investment.

"USIBC believes the next step in retail sector development is lifting current restrictions in foreign direct sales to Indian consumers via e-commerce," the apex body of American companies doing businesses in India asked the Finance Minister.

In a detailed 23-page memorandum submitted ahead of the annual budget later this month, USIBC said such an on-line approach to India's retail market could benefit the country in several ways.

First, unrestricted e-commerce would give Indian consumers a wider variety of goods at lower prices, thus directly advancing the goal of inclusive growth, said the memorandum, a copy of which has been provided to PTI by authoritative sources in the Union Finance Ministry.

"Second, this online activity would dramatically lower the costs of government procurements, thus reducing the budget deficit. Third, it would increase the productivity of Indian exports, which would narrow the trade deficit.

"Fourth, e-commerce lowers the barriers to entry for small and medium-sized businesses that often lack the capital to create physical stores," USIBC said.

Fuelling the creation and growth of small business would promote employment, especially in rural areas that lack access to the infrastructure of India's major cities, it said.

USIBC added that e-commerce promotes the development of infrastructure because it creates the need for warehouses, customer fulfilment centres, systems for transportation and delivery, and a virtual network to support the process.

"The infrastructure development would in turn trigger more employment as workers would be hired to build and operate the new systems.

"The demand would certainly rise for IT and customer care specialists, skill sets where India has already achieved world-class status," the industry body said.

PTI