Technoglitch
Core Member
E-commerce companies, many of them unicorns (valued at $1 billion or more), could get full foreign direct investment (FDI) if a proposal of Department of Industrial Policy and Promotion (DIPP) passes muster.
Press Trust of India reported on Tuesday that the government was considering permitting 100 per cent FDIin the marketplace format of e-commerce to attract more foreign investments. This follows a recent meeting of top officials in DIPP, and the department of economic affairs and corporate affairs.
A DIPP official told Business Standard that the proposal to allow FDI in e-commerce marketplace had been in the works for quite some time. It is believed that while DIPP is bullish on permitting no-holds-barred FDI in the sector, finance ministry is yet to give a green light to the proposal. If it does get a go-ahead, online marketplace FDI rules would be a part of the detailed guidelines to be issued soon.
At present, while no foreign investment is permitted in e-commerce, there are no rules for those operating in the online marketplace format. Major online players, including Flipkart, Snapdeal, Amazon.in, Shopclues and Paytm, which are funded by marquee international investors, operate as marketplace firms, thereby skirting the FDI hurdle.
As for FDI, the rules in the retail sector have remained complex and numerous, resulting in confusion. FDI norms for multi-brand retail, single-brand retail, wholesale, e-commerce, market place are all quite different from each other.
After years of a total ban on foreign investment, the United Progressive Alliance government allowed up to 51 per cent FDI in multi-brand or supermarket segment that’s operated by the likes of Walmart and Tesco.
But it was left to the states to decide who wants foreign players and who does not.
Of the other categories in retail, 100 per cent FDI is permitted in single-brand as well as in cash-and-carry or wholesale business. While no FDI is allowed in e-commerce activities, the online marketplace has been out of the purview of any rules.
http://www.business-standard.com/ar...fdi-in-marketplace-e-tail-116021000042_1.html
Press Trust of India reported on Tuesday that the government was considering permitting 100 per cent FDIin the marketplace format of e-commerce to attract more foreign investments. This follows a recent meeting of top officials in DIPP, and the department of economic affairs and corporate affairs.
A DIPP official told Business Standard that the proposal to allow FDI in e-commerce marketplace had been in the works for quite some time. It is believed that while DIPP is bullish on permitting no-holds-barred FDI in the sector, finance ministry is yet to give a green light to the proposal. If it does get a go-ahead, online marketplace FDI rules would be a part of the detailed guidelines to be issued soon.
At present, while no foreign investment is permitted in e-commerce, there are no rules for those operating in the online marketplace format. Major online players, including Flipkart, Snapdeal, Amazon.in, Shopclues and Paytm, which are funded by marquee international investors, operate as marketplace firms, thereby skirting the FDI hurdle.

As for FDI, the rules in the retail sector have remained complex and numerous, resulting in confusion. FDI norms for multi-brand retail, single-brand retail, wholesale, e-commerce, market place are all quite different from each other.
After years of a total ban on foreign investment, the United Progressive Alliance government allowed up to 51 per cent FDI in multi-brand or supermarket segment that’s operated by the likes of Walmart and Tesco.
But it was left to the states to decide who wants foreign players and who does not.
Of the other categories in retail, 100 per cent FDI is permitted in single-brand as well as in cash-and-carry or wholesale business. While no FDI is allowed in e-commerce activities, the online marketplace has been out of the purview of any rules.
http://www.business-standard.com/ar...fdi-in-marketplace-e-tail-116021000042_1.html