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Revised Digital Commerce Policy yet to get Cabinet approval

Photo: Collected

The Digital Commerce Policy, which has been formulated and revised to attract foreign investment, is yet to get the approval of the Cabinet Division.

In the last week of July, the reviewed policy was forwarded to the Cabinet for approval.

The government brought changes in the policy by publishing a gazette notification following objections from foreign e-commerce ventures.

The gazette notification, issued by the commerce ministry on January 31, barred the holding of majority stakes by foreign firms in e-commerce ventures in the country.

However, foreign e-commerce ventures raised objections when the government imposed a 49 per cent equity limit for foreign investors in the National Digital Commerce Policy-2018. They asked the government to revise the policy to increase their stake.

In the revised policy, a foreign investor can even hold 100 per cent equity, but 95 per cent of human resources will have to be local.

Abdul Wahed Tomal, secretary of the e-Commerce Association of Bangladesh (e-Cab), told Fintech that he welcomed the changes made to the policy to attract foreign investment.

Tomal said e-Cab earlier proposed that foreign companies had been asked to recruit more than 95 per cent of their human resources from domestic sources. Besides, they have to collect the raw materials from local sources. They would not be able to set up a physical store in Bangladesh, Commerce ministry included our proposal and we expressed happiness for this, he added.

The global e-commerce accounted for USD 5 trillion trades last year, in which Bangladesh’s equity was only USD 7 billion.

Jafar Uddin, senior secretary of the commerce ministry, said the draft of the Digital Commerce Policy was being revised to attract more foreign investment.

The government framed and enacted the Digital Commerce Policy-2018 for a balanced growth of e-commerce last year, following a boost in online and social media-based businesses in the country.

According to the commerce ministry, it has taken the initiative to clear the e-commerce sites run by telecom operators of the country.

At present, Grameenphone, Robi, and Banglalink are running those sites.

As per the previous policy, a foreign company could not run a digital commerce business without forming a joint venture with a local company.

The government took steps to have a separate policy for e-commerce in 2016 to help the sector flourish and to curb fraud. The draft policy was prepared by the e-CAB, as instructed by the ICT Division. The e-CAB had handed over the draft to the ICT Division in August 2016.

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