BENGALURU: No more big billion day for online shoppers as the new foreign direct investment (FDI) guidelines issued by the Department of Industrial Policy and Promotion (DIPP) prohibits online marketplaces like Flipkart, Snapdeal, Amazon and others from giving direct discounts and offering promotional programmes such as cash-back offers to consumers, reports Business Insider, India Bureau. Now, the power of giving discounts lies with the sellers of these online portals only.

Over the last few years, rise of e-commerce platforms have transformed the lifestyle and shopping choices of consumers who prefer to shop online rather than going to the market in person to save time and seek a wider range of variety. The advantages and benefits like low prices, heavy discounts, lucrative offers and door-step delivery, offered by these e-commerce platforms have lured consumers to turn towards online shopping. On the contrary, these offers have turned out to be nightmare for brick & motor retailers as it adversely affected their business, taking away their customers. The new set of guidelines has been framed to bring etailers and physical marketplaces on the same level of disengagement with neither of the side having any direct customer interaction and direct or indirect influence on the price of the product.

Government’s decision to introduce such policy has been taken in response to the allegations made by retailers of physical marketplaces against their online counterparts for violating foreign direct investment rules and engaging in business-to-consumer (B2C) sales. According to the existing DIPP’s policy, 100 percent FDI is allowed in ecommerce with the restriction that the companies can engage only in B2B ecommerce activities.  Hence to bring more clarity in business and to provide equal opportunity of earning customers as well as profit for both online and offline retailers, the new rules have been introduced to restrict online portals from influencing prices.  With this initiative, the government is making efforts to protect small and medium enterprises that are subjected to loss due to discounts available online.

Read Also: RBI Cuts Key Lending Rate By 25 Basis Points

Not Every Off-Shore Company Need Be Illegitimate: Rajan