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Govt mulls 100% FDI in e-commerce marketplace
Feb '16
With an eye on a larger flow of foreign investments, the government is considering permitting 100 per cent FDI in the marketplace format of e-commerce retailing, according to an agency report.

Currently, 100 per cent FDI is allowed only in business-to-business (B2B) e-commerce and not in the retail segment.

The norms on FDI in the sectors of e-commerce, and IT and ITeS are expected to be part of detailed guidelines, which would be rolled out soon by the government, sources said.

At a meeting of senior officials from departments of Industrial Policy & Promotion, Corporate Affairs and Economic Affairs and others, the DIPP is said to have suggested that 100 per cent FDI should be allowed in “marketplace model e-commerce” activities. In such a model, the e-commerce company provides an online platform for buyers and sellers.

Global e-commerce giants such as Amazon and Ebay operate online marketplaces in India while homegrown players such as Flipkart and Snapdeal have foreign investments in the absence of any clear FDI guidelines on various online retail models.

An e-commerce firm carry its business either through marketplace model or inventory based model. In the inventory based model, a company owns and keeps the goods in warehouses.

The officials also deliberated upon the definition of “e-commerce”. It may broadly cover transactions between buyer and seller through electronic mode like internet, mobile and televisions.

The DIPP is working on guidelines for the e-commerce sector even as a tussle continues to rage between online and offline retailers. The department has already carried out stakeholders consultations with states, e-commerce companies and other departments. (SH)

Fibre2Fashion News Desk – India

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