Now Reading: Partial FDI in e-commerce ‘almost worse’ than ban: expert
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Partial FDI in e-commerce ‘almost worse’ than ban: expert
Shanker Singham, President of the Competere Foundation, has said that India's partial opening of foreign direct investment (FDI) in e-commerce may be more harmful than a complete ban. In July 2025, the…
Shanker Singham, President of the Competere Foundation, has said that India's partial opening of foreign direct investment (FDI) in e-commerce may be more harmful than a complete ban. In July 2025, the government allowed FDI in inventory-based e-commerce firms, but only for exports. Singham argued that this policy picks winners by favouring one business model over others, distorting competition.
A report by the Centre for Trade and Investment Law and the Competere Foundation estimates that India's anti-competitive market distortions could cost the economy $173.6 billion over five years, or about 4.2% of GDP. Of this, $127.2 billion is attributed to foreign investment restrictions. Singham said the government should balance national security concerns against the cost of lost competition.
Indian Opinion Analysis
The government's July 2025 FDI relaxation is a narrow carve-out: it only permits foreign-owned inventory for export, not for domestic sales. This keeps the core marketplace model, used by Amazon and Flipkart, still subject to FDI bans. The $173.6 billion loss estimate, though contested, signals the scale of the debate. The real question is whether the government will next open domestic inventory-based e-commerce to FDI, which would directly affect existing players and India's retail sector. Watch for the next trade policy review or a finance ministry discussion paper on e-commerce FDI.
Source: thehindu.com
This story was synthesised by AI from the source linked above.
