Govt allows 100 pc FDI in marketplace-based e-retailers

29 March, New Delhi

Union Government Tuesday allowed 100 per cent foreign direct investment (FDI) through automatic route in online retailers operating on marketplace model of e-commerce.

In the market place model of e-commerce, an online retailer does not directly sell to customers. Instead, it provides a platform for other sellers. On the other hand, an inventory-based model means e-retailer sells out of its own inventory,however, restriction will continue on FDI into e-retailers that work on inventory model.’100 per cent FDI under automotive route is permitted in marketplace model of e-commerce,” the Department of Industrial Policy and Promotion (DIPP) said in a press note.

“FDI is not permitted in inventory-based model of e-commerce,” the press note added.The policy move is expected to provide a big relief to the domestic e-retailers like Flipkart and Snapdeal who have been battling tough competition from Amazon and Ebay.