The Department of Industrial Policy and Promotion (DIPP) has released Press Note No. 3 (2016 series) dated 29th March, 2016 on Foreign Direct Investment (FDI) in eCommerce Companies.
The Department of Industrial Policy and Promotion (DIPP) has released Press Note No. 3 (2016 series) dated 29th March, 2016 on Foreign Direct Investment (FDI) in eCommerce Companies.
The Press Note lays down the following key points:
1. Ecommerce defined: Ecommerce to include buying and selling of goods and services over any digital network; It includes TV channels (TV shopping etc.), Mobile sites, internet sites and all other electronic media etc..
2. Inventory based model of e-commerce defined: i.e. where inventory is owned by the ecommerce entity and is sold directly to the consumers (B2C).
3. Market place based model of e-commerce defined: i.e. providing of an IT platform and acting as a facilitator between the seller and the buyer.
4. It has been clarified that 100 % FDI is permitted in market place model of e-commerce and FDI is not allowed in inventory based model of e-commerce.Market place ecommerce entities can enter into B2B transactions with the sellers registered on the platform.
5. The Marketplace ecommerce entity will not be allowed to undertake more than 25 % sales through one vendor / their group company
6. The Marketplace shall clearly identify the Seller name, address, TIN etc. on its website, invoices etc.
7. After sales service will be the responsibility of the seller Marketplace entities will not be able to influence the sale price.
Full Press note no 3 is enclosed pdf file
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