wordpress blog stats
Connect with us

Hi, what are you looking for?

, , , ,

DIPP defines what ecommerce is

cmn amazon box

The government clarified that it would allow 100% foreign direct investment (FDI) in business-to-business. ecommerce under the automatic route. There is nothing new in the Indian governments policy on FDI in ecommerce. Just a clarification of what was always the case on the marketplace model of ecommerce.

More importantly, the Department of Industrial Policy and Promotion (DIPP) has come out with a number of definitions for clearing up with e-commerce is. Secretary of the DIPP, Amitabh Kant, in a tweet said that the definitions would help in taxation as several states would charge the ecommerce companies rather than the sellers.

Here’s what the DIPP defines ecommerce as:

Ecommerce – Ecommerce means the buying and selling of goods and services including digital products over digital and electronic network.

Advertisement. Scroll to continue reading.

Marketplace based model of ecommerce – Providing of an information technology platform by an ecommerce entity on a digital ad electronic entity which can act as a facilitator between buyer and seller.

Inventory based model of ecommerce – An ecommerce activity where the inventory of goods and services is owned by e-commerce entity and sold directly to consumers. FDI is not permitted in the inventory based model of ecommerce.

Other conditions

-Marketplace ecommerce entity will be permitted into transactions with sellers registered on its platform on a B2B basis. However, FDI in B2C ecommerce is permitted in the the following circumstances:

i) A manufacturer is permitted to sell its products manufactured in India through ecommerce retail.

ii) A single brand retail entity is operating through brick and mortar stores, is permitted to undertake retail trade through ecommerce

Advertisement. Scroll to continue reading.

iii) An Indian manufacturer would be the investee company where it is the owner of the Indian brand. The rules also add that the manufacturer must create 70% of the goods in-house and 30% may be sourced from Indian manufacturers.

– An ecommerce entity will not permit more than 25% of the sales affected through its marketplace from one vendor or their group companies.

– Ecommerce entity may provide support services to sellers in respect of warehousing, logistics, order fulfillment, call centre, payment collection and other services.

– In marketplace model, any guarantee and warranty of the goods sold will be the responsibility of the seller. This should clear up matters when it comes to the liability of goods sold on ecommerce sites. More on that here, here and here.

– Ecommerce entities providing marketplace will not directly or indirectly influence the sale price of goods or services and will maintain a level playing field. This could translate to the government clamping down on heavy discounting. The nuances of whether cashbacks constitute as discounts are discussed more in detail here.

Advertisement. Scroll to continue reading.
Written By

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.



The Delhi High Court should quash the government's order to block Tanul Thakur's website in light of the Shreya Singhal verdict by the Supreme...


Releasing the policy is akin to putting the proverbial 'cart before the horse'.


The industry's growth is being weighed down by taxation and legal uncertainty.


Due to the scale of regulatory and technical challenges, transparency reporting under the IT Rules has gotten off to a rocky start.


Here are possible reasons why Indians are not generating significant IAP revenues despite our download share crossing 30%.

You May Also Like


Google has released a Google Travel Trends Report which states that branded budget hotel search queries grew 179% year over year (YOY) in India, in...


135 job openings in over 60 companies are listed at our free Digital and Mobile Job Board: If you’re looking for a job, or...


Rajesh Kumar* doesn’t have many enemies in life. But, Uber, for which he drives a cab everyday, is starting to look like one, he...


By Aroon Deep and Aditya Chunduru You’re reading it here first: Twitter has complied with government requests to censor 52 tweets that mostly criticised...

MediaNama is the premier source of information and analysis on Technology Policy in India. More about MediaNama, and contact information, here.

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ

Subscribe to our daily newsletter
Your email address:*
Please enter all required fields Click to hide
Correct invalid entries Click to hide

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ