Colossal mistake of policy to have opened up Internet sector to FDI ( eg, Amazon) . We could hv created giant local net cos, who cud 1/2 — Shankar Sharma (@1shankarsharma) July 11, 2016

2/3 have conquered the world like Alibaba. China restricted sector, and has a trillion usd Internet sector. We shud hv done what we did — Shankar Sharma (@1shankarsharma) July 11, 2016

NEW DELHI: In March this year, the government introduced 100 per cent FDI in the ‘marketplace’ model for e-commerce companies, and ace investor Shankar Sharma feels that dealt a death blow to many of the home-grown e-commerce players.Sharma, VC & Joint MD of First Global, says had this sector been walled off from foreign competition, India would have had a fair chance of giving birth to its own versions of Amazon and Alibaba “Why couldn't we wall off this sector to direct foreign competition, and allowed freedom to investor capital to come into our homegrown companies like Flipkart ,” Sharma asked in an email interview with ETMarkets.com.India’s e-commerce sector is expected to grow seven times to $140 billion by 2020, according to investment bank Morgan Stanley Amazon, Alibaba – the two global giants in the e-commerce space – have since entered India and disrupted the duopoly of home-grown startups Flipkart and Snapdeal Drawing parallel between the much-protected banking industry and the e-commerce sector, Sharma said, “Like private banks, we would have created huge domestic companies. Instead, we are seeing a behemoth called Amazon eating everybody's lunch. It's stupid, silly policy.”Sharma said much like the banking sector, where competition from foreign banks was curtailed yet foreign capital in the form of equity investment was allowed in these banks, the same model could have been replicated in the e-commerce space too.“Most of our local banks are majority owned by foreigners. So capital has come from foreigners to fund their growth, but NOT from foreign banks. That’s the perfect model,” he said.“Domestic competition is restricted, foreign competition is almost zero. As a result, domestic private sector banks have become behemoths, rivalling many global players in terms of profits and market capitalisation,” he said.In terms of market share and expertise, companies like Flipkart and Snapdeal stand nowhere in comparison to Amazon or Alibaba.As of 2016, Flipkart had a revenue of just above $1 billion and a market valuation of $11 billion with 33,000 employees on its rolls.That pales in comparison with the Jeff Bezos-led Amazon, which had $108 billion in revenues, a $250 billion market value and employs 230,000 worldwide.Although Amazon has been around since 1994 and Flipkart since 2007, allowing both the players equal footing in the name of increased competition may not pay off.“Look at China: their internet sector has grown into a trillion dollar market-cap industry, thanks to the walling off. They have created local tech/e-commerce giants which are now becoming global because they have the size, scale and capital to compete globally,” Sharma said.“We have wagged our tails too much to foreign direct investment in the name of reforms,” Sharma quipped. “In my view, we have failed miserably in putting a price to our massive domestic market, the way China has done.”