In a move that is required to help Foreign Investments in the e-commerce space, the government on Tuesday elucidated its position on foreign investment in e-commerce and allowed 100 per cent FDI in the marketplace configuration of e-commerce retailing under the automatic course.
While FDI has not been allowed in stock based model of e-commerce, the government extended the meaning of marketplace to incorporate bolster administrations to sellers as for warehousing, logistics, order satisfaction, call center, payment accumulation and different administrations.
In spite of the fact that the elucidation comes without clear FDI guidelines on different online retail models, the online marketplaces in India have as of now seen substantial outside ventures by a few worldwide players, (for example, Amazon) and into homegrown players, (for example, Flipkart and Snapdeal) who are working in the space.
To bring clarity, the DIPP has additionally turned out with the meaning of 'e-commerce', 'stock based model' and 'marketplace model'.
Marketplace model of e-commerce implies giving of an IT stage by an e-commerce element on a digital and electronic system to go about as a facilitator in the middle of buyer and seller.
The stock based model of e-commerce implies an e-commerce movement where stock of merchandise and administrations is possessed by e-commerce element and is sold to shoppers specifically, as indicated by the guidelines.
A marketplace substance will be allowed to go into exchanges with sellers enlisted on its stage on business-to-business premise, DIPP said.
It said that an e-commerce firm, notwithstanding, won't be allowed to offer more than 25% of the deals influenced through its marketplace from one vendor or their gathering companies.
"So as to give clarity to the surviving strategy, guidelines for FDI on e-commerce part have been planned," DIPP said.
The government has as of now permitted 100% FDI in business-to-business (B2B) e-commerce.