The Centre has issued fresh guidelines for foreign domestic investments (FDI) in e-commerce allowing 100 per cent FDI in the marketplace-based model — an arrangement where e-commerce companies provide an online platform to other vendors to sell their products. This ends the policy ambiguity that had led to litigation and uncertainty for foreign investors as well as domestic e-retailers.
Global e-commerce majors such as Amazon and eBay as well as domestic players with foreign investments such as Flipkart and Snapdeal, which have been operating through the marketplace model, can breathe easy as their activities have been legitimised. “100 per cent FDI is allowed in marketplace model of e-commerce. FDI is not allowed in inventory-based model of e-commerce,” a press note from the Department of Industrial Policy and Promotion (DIPP) stated.