Home / Knowledge / News / Apparel/Garments / 'E-commerce marketplace model not recognised under FDI'
'E-commerce marketplace model not recognised under FDI'
06
Jan '16
In what could be a big blow to e-commerce players in India, the Department of Industrial Policy and Promotion (DIPP) which monitors foreign investment in India, has told the Delhi High Court that the marketplace model used by e-commerce companies is "not recognised" in the country's FDI policy.

The department has also suggested that it is up to the financial watchdogs to investigate whether there has been any violation of FDI rules by online retailers, The Economic Times has reported.

DIPP is "mandated only with formulation of FDI policy", it said in a reply late last month in a case filed by brick-and-mortar retailers. The department's position assumes significance as the country's biggest online retailers such as Amazon India, Flipkart and Snapdeal function as marketplaces — platforms linking buyers with sellers — because the rules don't allow overseas investment in entities that sell directly to consumers.

"FDI is a capital account transaction and thus any violation of FDI regulations are covered by penal provisions of FEMA (Foreign Exchange Management Act)," DIPP told the high court. It also emphasised that the country's regulations "unambiguously" do not permit foreign investment in B2C e-commerce and said India only allows 100 per cent overseas capital in B2B ventures. Traditional retailers say the marketplace model is merely a ruse to get around this stipulation.

Over the past year, India's brick-and-mortar retailers have been complaining loudly that foreign-funded ecommerce companies violate FDI norms. The Retailers Association of India and the All India Footwear Manufacturers & Retailers Association have filed separate petitions against the government in the Delhi High Court alleging the circumventing of FDI norms. (SH)

Fibre2Fashion News Desk - India


Must ReadView All

Apparel/Garments | On 23rd Sep 2017

AAFA urges negotiators to preserve TPLs in NAFTA

The American Apparel & Footwear Association (AAFA), an alliance of...

Textiles | On 23rd Sep 2017

SIMA urges Centre to re-look duty drawback rates

he Southern India Mills’ Association (SIMA) has appealed to the...

Textiles | On 23rd Sep 2017

PKR 690.65-mn budget for Pakistan Cotton Committee

The Pakistan Central Cotton Committee (PCCC) recently approved a PKR...

Interviews View All

Subhashini Srinivasan
The S Studio

Ethnicwear market will see an upward trend if uniqueness and quality are...

Varinder Singh Jawanda
Trendy Bharat

Sizing and fitting issues are inherent problems for companies expanding...

Smith Vaghasia
Sanado India

Online remains the best destination for shopping

Mohammad Hassan
Biax Fiberfilm

About one in every 20 patients picks up an infection while hospitalised....

Eric Scholler
Groz-Beckert

The Indian market has huge potential in technical textiles, and by far,...

Kevin Nelson
TissueGen

Kevin Nelson, Chief Scientific Officer, TissueGen discusses the growing...

Wendell Rodricks
Wendell Rodricks

"We should not compare India and the West. There are things we do that...

Yash P. Kotak
Bombay Hemp Company

One of the directors of Bombay Hemp Company, Yash P. Kotak, speaks to...

Jay Ramrakhiani
Occasions Elegance Wear

It is believed that by early 19th century, Varanasi weavers had moved away ...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

September 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
74.5%
No
12.8%
Skip
12.8%

Total Votes: 47

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
61.7%
No
25.5%
Skip
12.8%

Total Votes: 47

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
87.2%
No
6.4%
Skip
6.4%

Total Votes: 47

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
70.2%
No
10.6%
Skip
19.1%

Total Votes: 47


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search