Manufacturing companies may enter e-commerce: Government set to allow 100% FDI in white label ATMs

NEW DELHI: The government is set to allow 100 per cent FDI through the automatic route for setting up white label ATMs, while permitting Indian “manufacturing companies“ to enter the e-tailing business. Both the issues, along with a change in the licensing norms for potable alcohol, are on the agenda for Wednesday's cabinet meeting.

Sources said the department of industrial policy and promotion, which is piloting the two proposals, has proposed that the definition of manufacturing should be the same as the one in the Income Tax Act. The move, however, may not go down well with the likes of Fabindia, Biba and Hidesign, which had suggested that companies that get around 70 per cent of their goods manufactured locally should be allowed to enter business-to-consumer e-commerce. But given that the likes of Fabindia give designs, material and other assistance to artisans -without actually manufacturing itself -would mean that they would not benefit from the new dispensation.

In case of white label ATMs, the idea is to help companies set up the cash dispensing machines in remote areas where even banks may not find it lucrative. Industry experts, however, said that the rush for setting up ATMs is expected to be more in urban areas as withdrawals are much higher and usage is more. But the government is hoping that either way, an increase will also result in local manufacturing of the automated teller machines and push the Make in India agenda.