A national policy on retail trade, promised by the ruling Bharatiya Janata Party in its 2019 election manifesto, is expected to lay down an overarching framework for the sector to cover various segments such as physical retail, direct selling, hypermarkets and e-commerce, a senior government official told The Indian Express, pointing out that the policy will focus on spelling out regulations, improving access to funds and compliance costs, while improving the enabling environment for the retail sector as a whole. A draft of the policy is expected to be out over the coming week.
The retail policy will also aim to bridge the gap between various stakeholders in the retail ecosystem, such as online commerce and traditional small retailers. In its 2019 manifesto, BJP said that for the welfare of small traders, its government will establish a National Traders’ Welfare Board and create a National Policy for Retail Trade for growth of retail businesses.
E-commerce firms and traditional retail traders have been at loggerheads, with the latter accusing online retailers of distorting the level-playing field by offering deep discounts on back of foreign funding. However, e-commerce players have pointed out that currently online retail occupies less than 5 per cent of the total retail pie in India.
Could offer level playing field to all players
As e-commerce firms look to expand into new segments, such as groceries, alongside going deeper into India’s geography, the conflict between online retailers and traditional ones could widen. A broad policy framework covering different segments could offer a level playing field to all players in the ecosystem, while helping the smaller retailers modernise to meet the growing demand.
According to the official cited above, stakeholder meetings will be held over the coming week, which will be aimed at getting e-commerce players to handhold brick-and-mortar retail firms who want to enter the online retail space. However, for e-retailers a separate e-commerce policy is being drafted, which would be readied over the next year.
Last week, at the first formal meet between trade associations and the Department for Promotion of Industry and Internal Trade, representatives of the Confederation of All India Traders (CAIT) had said the policy should include upgradation and modernisation of existing formats of retail trade. “The government has almost moved to e-system whereas till now only 35 per cent of traders out of 7 crore have been able to computerise their business,” CAIT secretary general Praveen Khandelwal said while participating in the deliberations.