Government permitted 100% FDI in e-commerce

Q.  Government has permitted 100% FDI in which sector to attract more foreign investments?
- Published on 30 Mar 16

a. e-commerce
b. manufacturing
c. services
d. agriculture

ANSWER: e-commerce
 
Government on 29th March 2016 permitted 100% FDI in the market place format of e-commerce retailing to attract more foreign investments. Guidelines issued by the department of industrial policy and promotion on FDI in e-commerce have not allowed the same in inventory based model of e-commerce however.
DIPP has also defined market place model, inventory based model and e-commerce.
  • Market place model: This model of e-commerce provides IT platform by e-commerce entity on digital and electronic network to facilitate negotiations between buyer and seller
  • Inventory based model of e-commerce: A model where e-commerce activity centres around inventory of services and goods owned by e-commerce industries and sold to consumers directly.
  • It has further been said that e-commerce firm will not be permitted to sell more than 25% of the sales through the market place from one vendor or their group companies
  • Government has also allowed 100 percent FDI in B2B commerce.

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