Indian govt clarifies position on FDI in E-commerce

18 Mar '16
2 min read

Commerce and Industry Minister Nirmala Sitharaman said in a written reply in Rajya Sabha that foreign investment in Business to Customer (B2C) e-commerce activities has been opened in a calibrated manner.

She listed three circumstances under which an entity is permitted to undertake retail trading through e-commerce.
First, a manufacturer is permitted to sell its products manufactured in India through e-commerce retail.

Second, a single brand retail trading entity operating through brick and mortar stores, is permitted to undertake retail trading through e-commerce.

Third, an Indian manufacturer is permitted to sell its own single brand products through e-commerce retail. Indian manufacturer would be the investee company, which is the owner of the Indian brand and which manufactures in India, in terms of value, at least 70 per cent of its products in house, and sources, at most 30 per cent from Indian manufacturers.

She also said that as per regulations framed under Foreign Exchange Management Act, (FEMA) 1999 to promote foreign investment, FDI up to 100 per cent under the automatic route is permitted in companies engaged in e-commerce provided that such companies would engage in Business to Business (B2B) e-commerce. (SH)

Fibre2Fashion News Desk – India

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