Govt in Plan for 100 Pct FDI in e-Market Place of e-Commerce

BENGALURU: E-commerce firms carry its business either through inventory based model or market place model by providing an online platform for buyers and sellers. With a view to attract more foreign investments, the government is considering to permit 100 percent Foreign Direct Investment (FDI) in the market place format of e-commerce retailing.

The officials are intended upon the definition of "e-commerce". It may surround transactions between buyer and seller through electronic devices like mobile, desktop, internet, and televisions. Nowadays, most entrepreneurs running online retail companies like Amazon and Ebay are operating online marketplaces in India. In addition, Flipkart and Snapdeal have been hoping for an all-encompassing FDI policy that will clear doubts and confusions once and for all.

Last week, a group of senior officials from DIPP, corporate affairs and economic affairs, among others, discussed these matters in detail. In response, the DIPP has suggested that 100 percent FDI should be allowed in “market place model e-commerce” activities.

As a part of detailed guidelines the government would introduce the standards on FDI in e-commerce, IT and ITeS, sources said. The department has already carried out stakeholders’ consultations with states, e-commerce companies and other departments. Due to growing contention between online and offline retailers it’s become a need for the Department of Industrial Policy and Promotion (DIPP) to work on guidelines for e-commerce sector. At present, 100 percent FDI is allowed only in business-to-business (B2B) e-commerce and not in the retail segment.

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