Manufacturing Companies May Soon be Allowed to Sell on E-commerce

The government is soon expected to allow foreign and domestic companies with manufacturing units in India to sell their products through online portals directly to consumers. At present, there is no policy with the regard to direct online sale of goods by manufacturing units. The proposed move is aimed at boosting manufacturing sector in the country. 

According to the proposal of the Department of Industrial Policy and Promotion (DIPP), those companies which are manufacturing in India and have FDI, even if it is up to 100 per cent, would be permitted to sell their products through e-commerce platforms. The government is also expected to define “manufacturing” activity to provide more clarity on the issue. At present, manufacturing companies in sectors such as mobile phones and electronic items tie up with domestic e-commerce players to sell their products.

The DIPP has approached the Cabinet on the issue and it is expected to take a decision on the matter soon, sources said. The government has given a slogan of ‘Make in India’ to boost manufacturing activities in the country. Under the programme, the government is taking steps to improve ease of doing business in the country besides easing norms for foreign direct investment to attract overseas investments.
In the last few months, the government has eased FDI policy in sectors including defence, construction, railways and medical devices. On July 10 last year, Finance Minister Arun Jaitley in his Budget speech had said, “FDI in the manufacturing sector is today on the automatic route. The manufacturing units will be allowed to sell its products through retail, including e-commerce platforms without any additional approval”.
The government aims at increasing the share of manufacturing in the economic growth to 25 per cent in the next one decade from the current 16 per cent. It also aims at creating 100 million jobs during the period.