FDI in e-commerce

The Department of Industrial Policy and Promotion (DIPP) issued guidelines today  relating to foreign direct investment in the e-commerce industry effective today. Please read the document in the link for the press note: DIPP guidelines on FDI in e-commerce

Interesting highlights include:

(a) Defining and classifying ‘e-commerce’, ‘e-commerce entity’, ‘Inventory based model of e-commerce’, and ‘Market based model of e-commerce’;

(b) Permitting 100% FDI in the  Market based model of e-commerce  but disallowing FDI in an Inventory based model of e-commerce;

(c) Conditions for permitting FDI including inter-alia, not exercising ownership over the  inventory, not permitting over 25% of its sales through its market place from one vendor  or through their group companies and not influencing directly or indirectly the sale price of goods and services by maintaining a level  playing  field.

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