Retailers claim alternate route of 'marketplace model' has nullified FDI ban in e-commerce

The Delhi High Court recently asked the government to consider a retailers association's plea seeking a level-playing field with e-commerce sites like Flipkart in the FDI policy and take a decision within four months.

The Retailers' Association of India (RAI) has claimed that while FDI was banned for e-commerce in the inventory model, an alternate route of "marketplace model" has been created which has nullified the government's ban.

According to PTI, Justice Rajiv Shakdher told the government, represented by advocate Jasmeet Singh, to consider the plea of RAI as a representation. As per marketplace model, an e-commerce website acts as a platform alone and the transaction happens between the actual seller and the consumers or the buyers.

RAI - a lobby group for Future Group, Reliance Industries Ltd's retail unit and other such retailers, also alleged that using this model, the e-commerce sites have circumvented the FDI policy. It has also challenged the various conditions imposed by the government prior to giving approval to FDI in multi-brand retail.

Government standing counsel Jasmeet Singh told the court that if other retailers were accorded a hearing, then RAI would also be given an opportunity to state its case. The government also said that the retailers had turned down its invitation to discuss FDI in e-commerce.

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