Government has allowed 100% FDI in e-commerce entities running online marketplaces. FDI in multi-brand retail is still not allowed which means that e-commerce companies cannot sell products of their own brands. They can only act as a marketplace and facilitate sellers of other brands.
What more provisions are included?
- Marketplace will not have any relation with guarantee and late deliveries. These would be responsibilities of seller
- e-commerce firms can provide support services to sellers, including warehousing, logistics, call centres and payment collection
- an e-commerce firm will not be permitted to sell more than 25% of total sales from one vendor or its group companies
How the latest move protects offline retailers?
To protect the offline retailers, in its latest policy the government has barred marketplaces from offering discounts on their own. These can only be offered by the vendors selling on the platforms. This is also aimed at ending “predatory pricing” by online companies, and provide a level playing field.
Also read RSTV debate FDI in e-commerce
Good Read to understand the issue : https://www.quora.com/Whats-going-to-happen-to-Amazon-in-India/answer/Balaji-Viswanathan-2?srid=uz7i7