India eases FDI policy for foreign-funded e-com firms to boost exports

India’s Department of Department for Promotion of Industry and Internal Trade (DPIIT) yesterday liberalised its Foreign Direct Investment (FDI) policy, allowing foreign-owned retail e-commerce companies to build their own inventories exclusively, for export of goods manufactured and produced in India.“The above decision will take effect from the date of FEMA (Foreign Exchange Management Act) notification,” DPIIT said.

India has liberalised its FDI Policy, allowing foreign-owned retail e-commerce companies to build their own inventories exclusively for export of goods manufactured and produced in India.
The ban on foreign-funded inventory-led e-commerce for the domestic market remains intact.
The policy is intended to “facilitate greater exports through easier and increased access to global markets by Indian sellers.”

At present, the government allows cent per cent FDI in marketplace based e-commerce models, but prohibits FDI in inventory based e-commerce models.

The ban on foreign-funded inventory-led e-commerce for the domestic market remains intact.

Under the inventory-based model, an e-commerce entity owns the inventory of goods and sells them directly to consumers, while under the marketplace model, the platform acts only as an intermediary, connecting independent sellers with buyers without owning the inventory.

DPIIT said the policy is intended to “facilitate greater exports through easier and increased access to global markets by Indian sellers.”

Fibre2Fashion News Desk (DS)