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Nirmala Sitharaman to discuss e-commerce policy with state ministers

Commerce and industry minister Nirmala Sitharaman will discuss the e-commerce policy framework with state industry ministers on Wednesday
 
BY:Rohit Bhardwaj


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Commerce and industry minister Nirmala Sitharaman will discuss the e-commerce policy framework with state industry ministers in a meeting on Wednesday that will explore the possibility of allowing foreign direct investments in consumer e-commerce, officials said.

"A whole gamut of issues on e-commerce will be discussed with the states including taxation, FDI policy framework and definition of e-commerce. In fact, based on the discussions the very nature of the policy in e-commerce may be changed," an official familiar with the agenda told ET. He said the final decision will be taken by the central government.

The ministers' meeting will be preceded by an official level meeting where officials of the department of commerce and department of industrial policy and promotion (DIPP) will meet industry officials of the states to discuss ease of doing business and e-commerce policy.

At this meeting, the commerce department will for the first time present international trade data for states, urging them to put in place a trade policy that encourages exports and jobs creation. The government has been under intense pressure from various countries to liberalise foreign direct investment in the e-commerce sector. The current policy allows 100% FDI in business-to-business (B2B) e-commerce but business-to-consumer (B2C) is closed to foreign investment.

This will be the second meeting called by Sitharaman where e-commerce will be the main agenda. In the last meeting, when she met industry players, e-commerce companies had raised the taxation issues faced in some states and sought amendment to the existing value added tax law, which does not recognise them as a service provider and asks them to pay taxes on the products sold from the warehouse.

Traditional traders have been opposing FDI in e-commerce. DIPP secretary Amitabh Kant last week met representatives from public sector banks, officials of commerce, finance, corporate affairs and consumer affairs ministries and representatives of retail companies and industry associations to seek their feedback on the matter.

State trade policy

On Wednesday, new commerce secretary Rita Teaotia will meet state industry secretaries to devise a strategy to boost exports through trade facilitative measures. "The idea of tomorrow's meeting is to see where the shoe is pinching," a second government official said on Tuesday.

Besides pushing for state trade policies to complement the national effort, the meeting will discuss several trade-related issues. "What is that holding the states back (on trade front)? There are infrastructure and governance issues in states. Every state needs to look at that. We are also looking at local taxation issues particularly where refund of taxes are involved," the official said.
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