DIPP and Ministry of Commerce& Industry have released Press Note No. 2 (2018 Series) dated Dec. 26th, to provide clarity to FDI policy on e-commerce sector.

The provisions will take effect from 1st Feb. 2019.

Guidelines/conditions for FDI on e-commerce sector are:

• 100% FDI under automatic route in marketplace model.
• FDI is not permitted in inventory based model.
• E-com. entity cannot exercise ownership/control over inventory. Not more than 25% of sales of any vendor or their group cos. would be allowed on the marketplace.
• An entity having equity participation or having control on its inventory by e-com. cos. or its group cos., will not be permitted to sell its products by such marketplace.
• E-com. entities will not mandate any seller to sell any product exclusively on its platform only.
• Cashback services provided by group cos. to buyers shall be fair and non-discriminatory.

For more: https://dipp.gov.in/sites/default/files/pn2_2018.pdf