Discounting logic

Extract:

Among the ideas in the draft policy are a sunset clause on discounts that can be offered by e-commerce firms and restrictions on sellers backed by marketplace operators. The aim may be to prevent large players from pricing out the competition though unfair practices, but taken too far such licensing and price controls can depress the sector. To give the government a say on who can offer how much discount and for how long, instead of letting consumers exercise informed choices, would be a regressive step for the economy. Foreign direct investment restrictions on players who can hold their own inventory are sought to be lifted, but there must be a majority Indian partner and all products have to be made in India. This seems like a leaf out of India’s retail FDI policy that has similar procurement diktats that are not easy to meet or monitor. E-tailer costs are also likely to rise on account of proposed norms on storing and processing data locally, while consumers and firms could both question the plan to stipulate payments via Rupay cards. The proposed e-commerce policy could drive away those planning online retail forays — and the opportunity to create jobs and benefit consumers would be lost.

Source:https://www.thehindu.com/todays-paper/tp-opinion/discounting-logic/article24586750.ece

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