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22 February, 2019 12:00:19 PM
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New digital policy bars majority stake by foreign firms

Gazette notification issued
Tareque Moretaza, Dhaka
New digital policy bars majority stake by foreign firms

New digital commerce policy has barred majority stake by foreign firms in e-commerce venture in the country. The commerce ministry on January 31 issued a gazette notification in this regards containing the National Digital Commerce Policy-2018, which does not allow foreign investors to hold over 49 per cent stake in any digital commerce venture in Bangladesh.

Any foreign company could not run digital commerce business without forming a joint venture with a local company, the policy said. According to the action plan under the policy, the government will take steps to facilitate foreign investment in the sector under joint ventures in which 51 per cent of equity should belong to a Bangladeshi company.

 Following the new policy, foreign digital commerce ventures in Bangladesh own 100 stakes such as ride-sharing service Uber, which is yet to get licence in Bangladesh, and digital commerce venture Daraz will have to sell their 51 per cent share to local companies.

Mustafa Jabbar, telecom and ICT minister said the policy has been finalised and it will be implemented by commerce ministry and other ministries concerned. Hopefully all sides will be benefited with the policy, he added.

Tech neutrality is a big deal for an e-commerce entrepreneur because 90 per cent of users access the internet through their mobile phones. “If the mobile phone users come to an e-commerce platform, then another company’s e-commerce business could be affected because of this,” AKM Fahim Masroor, former convener of the e-Commerce Association of Bangladesh (e-CAB), said.

Masroor also said the local e-commerce sector will develop due to the obligations of the foreign company’s joint venture with a local company.

“This is because a foreign company with huge potential creates unfair competition in the market,” he added.

“Foreign companies only create jobs for marketing. However, they don’t employ any local person for the platform, product development, design, engineering and other places. For these places, they recruit from abroad. Now, joint ventures with local entities will create opportunity for skill development of Bangladeshi people. Employment opportunities will also increase,” he noted.

“We welcome the initiative and hope that it will help the country’s e-commerce sector to grow and flourish,” said Abdul Wahed Tomal, e-CAB general secretary.

The policy will help public and private stakeholders to understand the industry better and will help the government understand the whole ecosystem. Hence, proper initiatives can be taken for the growth of the industry, an industry insider said.

“Now  over 715 firms are members of e-CAB, which delivered 30,000 products in 2017 and transacted Tk 1,800 crore. In addition, there are 1,000 e-commerce-based sites and 10,000 Facebook pages that run online businesses,” said Razib Ahmed, former president of e-CAB.

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

Later, e-CAB formulated the third draft of the policy in 2018. Zunaid Ahmed Palak, state minister for ICT, said the e-commerce market was growing rapidly around the world and proper regulations were required to propel further growth.

 “We're working with all the stakeholders in the sector to make it grow,” he added.

HM

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Editor : M. Shamsur Rahman

Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

Editor : M. Shamsur Rahman
Published by the Editor on behalf of Independent Publications Limited at Media Printers, 446/H, Tejgaon I/A, Dhaka-1215.
Editorial, News & Commercial Offices : Beximco Media Complex, 149-150 Tejgaon I/A, Dhaka-1208, Bangladesh. GPO Box No. 934, Dhaka-1000.

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