New FDI rules for e-commerce

Effective from 1 February 2019, the Government of India introduced several changes in its FDI policy for e-commerce. The new rules are reported to aim at safeguarding the interests of offline retailers. The key changes, among others, are: • Marketplace entities (entities providing information technology platforms to act as a facilitator between buyers and sellers) cannot buy more than 25% from a single vendor; • Entities in which there is equity participation by the marketplace entities or having control on its inventory by marketplace entities cannot sell their products on the platform run by the marketplace entities; • Marketplace entities cannot mandate any seller to sell any product exclusively on its platform; and • Marketplace entities are required to submit a compliance report to the Reserve Bank of India (RBI) by 30 September every year.

• Type:

  • Treatment and operation (Operational conditions )

• Industry:

  • Services (Wholesale and retail trade)

• Sources:

  • Ministry of Commerce & Industry, Review of the policy on Foreign Direct Investment (FDI) in e-commerce, https://dipp.gov.in/sites/default/files/pn2_2018.pdf, 26 Dec 2018
  • The Economic Times, What are India's new foreign direct investment rules for e-commerce? Read more at: //economictimes.indiatimes.com/articleshow/67777125.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=c, https://economictimes.indiatimes.com/news/economy/policy/what-are-indias-new-foreign-direct-investment-rules-for-e-commerce/articleshow/67777125.cms, 31 Jan 2019
  • Livemint, What India e-commerce policy entails for online retailers, https://www.livemint.com/Industry/4e8rKuiaJSGmsNU5BXUSvM/What-India-ecommerce-policy-entails-for-online-retailers.html, 16 Jan 2019