SynopsisIndia's FDI rules prohibit ecommerce companies from holding inventory, requiring them to operate on a marketplace model to prevent large inflows of foreign capital from distorting competition for small sellers and traders. The Department for Promotion of Industry and Internal Trade (DPIIT) said on Thursday that restrictions on foreign investment in inventory-based ecommerce will "not apply in case of exports of domestically manufactured and/or produced goods/products." The policy, executives said, creates an additional channel for Indian sellers to access overseas markets.The Centre's decision to relax its FDI policy to allow foreign direct investment in the inventory-based model of ecommerce for exports is unlikely to have a significant impact on the domestic online retail operations of companies such as Meesho, Flipkart and Amazon, industry executives said.However, they said the move would help smaller sellers and MSMEs expand their reach in global markets.Lawyers, meanwhile, urged caution in the policy'sNow Playing
ETtech Explainer: Ecommerce export FDI policy opens opportunities, but raises compliance questions - The Economic Times
India's FDI rules prohibit ecommerce companies from holding inventory, requiring them to operate on a marketplace model to prevent large inflows of foreign capital from distorting competition for small sellers and traders. The Department for Promotion of Industry and Internal Trade (DPIIT) said on Thursday that restrictions on foreign investment in inventory-based ecommerce will "not apply in case of exports of domestically manufactured and/or produced goods/products." The policy, executives said, creates an additional channel for Indian sellers to access overseas markets.
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