Dismiss brick & mortar Cos’ plea against ecomm cos: DIPP to HC

NEW DELHI: The Department of Industrial Policy and Promotion (DIPP) has urged the Delhi High Court to dismiss the petition filed by brick and mortar companies against online retailers. Among other reasons, it cited various Supreme Court rulings that policy making lies in the domain of the executive. The department said the issues raised by the retailers are already being examined. The department said in its reply that the petition filed by the footwear manufacturers association has not made any of the named ecommerce companies party to the petition and that any allegation regarding their functioning is bound to impact them adversely.

DIPP has asked the court to dismiss the petition “since the FDI (foreign direct investment) policy of the country is transparent and predictable with an effective regulatory mechanism.”

DIPP also said that it is a matter of dispute whether the ecommerce websites are allegedly engaged in business-to-consumer (B2C) in the garb of a business-to-business (B2B) model.

“The petitioner has failed to show that the FDI policy is arbitrary, mala-fide or ultra vires of the constitution.”

The current tussle between the online and offline retailers falls in the realm of policy. “We don’t want to create rigid rules and acts and define everything in ecommerce. This is a technology driven sector and we want everyone to grow,” DIPP secretary Amitabh Kant told ET. In its response to the petition filed by the footwear manufacturers association, DIPP has told the HC that it is considering all contentions raised by the petitioner and other retailers and four rounds of consultations have already been held with the stakeholders involved, state governments and nationalised banks. While the current policy does not recognize the term “marketplace” DIPP said,

FDI policy unambiguously does not permit FDI in B2C ecommerce. The shoe retailers had alleged in their petition that about two dozen ecommerce companies were operating their business in India “in complete violation of consolidated FDI Policy, 2015”.