The Department of Industrial Promotion & Policy revised its guidelines on FDI in e-commerce and set out new rules for marketplaces and vendors, with relation to inventory and FDI, last week. The new guidelines will come into effect from 1 February, 2019. The government’s updated policy explains principles laid down in the FDI Policy 2017, which allows 100% FDI in e-commerce via the automatic route. Here’s a look at what changes now The updated policy does not allow marketplaces to exercise control or ownership over the inventory of vendors on their platforms. For example, if a marketplace such as Amazon or Flipkart exercises ownership of control over inventory, this platform would no longer be a marketplace, but an inventory-based e-commerce business. The new policy reiterates that if a vendor sells over 25% of goods (presumably of all the goods sold on the…
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