Update: Chaudhary on FDI-driven growth

The Indian electronic-commerce (e-commerce) market was US$38.5 billion in 2018-19, a strong increase of 17% on 2017-18’s US$33 billion, according to a review by the National Association of Software and Services Companies (NASSCOM).

Strategic Review 2018 showed a 19.1% year on year growth in 2017-18, said Minister of State for Commerce and Industry, C. R. Chaudhary, in a written reply in the Lok Sabha on 17 Dec 2018.

To further fuel growth, 100% Foreign Direct Investment (FDI) is permitted under automatic route in companies engaged in e-commerce provided that such company engaged only in Business to Business (B2B) e-commerce.

Further, 100% FDI under automatic route is permitted in marketplace model of e-commerce but FDI is not permitted in inventory-based model of e-commerce.

Moreover, an entity is permitted to undertake retail trading through e-commerce under the following circumstances, subject to FDI policy provisions:

A manufacturer is permitted to sell its products manufactured in India through e-commerce retail;
A single brand retail trading entity operating through brick and mortar stores is permitted to undertake retail trading through e-commerce;
A food product retail trading entity is allowed to undertake retail trading, including through e-commerce, in respect of food products manufactured and/or produced in India.

For foreign investment in sectors under automatic route, no prior Government permission is required.

FDI in retail has been allowed in a calibrated manner after having intensive consultations with stakeholders including concerned Ministries, Departments, State Governments, apex industry chambers, Associations and other organizations taking into consideration their views/comments, said the Minister. fiinews.com