CIITA finally adopts ND Policy

The wait for the formalities over the adoption of the much awaited National Distributor Policy (NDP) is over with the guidelines finally coming into effect from June 18.

After a series of deliberations in discussing the merits and demerits of the policy, Confederation of Indian IT Associations (CIITA) has come to a conclusion in both defining as well framing a resolution over national distributors (ND) besides opening up broader avenues for NDs.

As per the schedule of NDP, CIITA has defined an ND as ‘a company which has a pan India presence and distributes products of OEMs on an exclusive or non exclusive basis where the OEM Invoices the ND directly or the ND directly imports goods from the OEM'.

In this definition, CIITA has taken into consideration only tier 1 players of the likes of Redington India, Ingram-Micro, RP Infotech, Savex and other players. In all, 11 players have been identified as NDs by CIITA.

However, the confederation deliberately avoided in strictly terming players (channel partners) operating both in distribution as well as retail as NDs despite some of these companies having a national distribution portfolio. Also, in its definition, CIITA has avoided any clause related to revenue contribution from distribution to topline.

Explaining the need to put NDP into effect, B. Hari, president, CIITA said, "We have been hearing complains related to alleged confidential data security and misuse from our members and thought of putting into effect a policy which can govern these alleged malpractices".

Hari also said that a ND can operate in any segment in the channel trading directly but cannot have subsidiaries directly under its control in any of the operative segments.

This landmark decision has opened up many new avenues for the NDs and now, they will no longer be limited to distribution only.

When asked about the expected market competition and the effect on retailers with the adoption of NDP, Hari said, "CIITA believes in a healthy competitive environment and we don't want to limit aspirations of anybody. A ND can deal and enter into any channel tier as long as it ensured confidentiality of shared data of its partners and not indulge in any unethical activity".

In its implementation part, CIITA has not officially formed any governing body or committee to monitor over NDP, but has left it up to its members (associations) to bring into notice any cases of breach.