Question : FDI Policy for e-Commerce

(a) whether the Government has recently announced changes in Foreign Direct Investment (FDI) policy for e-Commerce;

(b) if so, the details thereof;

(c) whether the e-retailers have sought more time as they complained of being not consulted while framing the policy by the Government;

(d) if so, the details thereof including the reaction of the Government thereto; and

(e) the steps being taken by the Government for regulation and growth of e-Commerce industry in the country?

Answer given by the minister

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THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE & INDUSTRY
(SHRI C.R. CHAUDHARY)

(a) & (b): In order to ensure due compliance of the FDI policy on e-Commerce, Press Note 2 (2018) has been issued. It puts in place certain conditions which shall come into effect from 01 February, 2019. These conditions include:
(i) An entity having equity participation by e-commerce marketplace entity or its group companies, or having control on its inventory by e-commerce marketplace entity or its group companies, will not be permitted to sell its products on the platform run by such marketplace entity.

(ii) e-Commerce marketplace entity will not mandate any seller to sell any product exclusively on its platform only.




(c) & (d): Representations have been received to defer the implementation of Press Note 2 (2018). The FDI policy on e-Commerce, first pronounced through Press Note 2 of 2000, permitted 100% FDI in B2B e-commerce activities. With a view to provide clarity to the extant policy and after extensive stakeholder consultations, guidelines for FDI on the e-commerce were issued vide Press Note 3 (2016). In order to provide further clarity to FDI policy on e-commerce, Press Note 2 (2018) has been issued.

(e): Stakeholder consultations on creating a framework for National Policy on e-Commerce with representatives from Government Ministries/Departments, Reserve Bank of India, Industry bodies, e-Commerce Companies, Telecom Companies, IT Companies and Payment Companies have been held. Issues regarding the e-Commerce sector are regularly reviewed by the Government.

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