fdi

E-Commerce FDI in India: Marketplace vs Inventory Model Explained

India allows 100% FDI in marketplace e-commerce but restricts inventory-based models. Here's what foreign companies need to know.

A

Accountify Editorial Desk

Finance Expert

18 March 2023
1 min read
714 views

E-Commerce FDI: Understanding India's Rules

E-commerce FDI regulations in India are among the most nuanced. Getting the model wrong can result in FEMA violations.

Marketplace Model (100% FDI Allowed)

The platform connects buyers and sellers. Cannot influence pricing, must maintain level playing field. No seller should account for more than 25% of sales. Amazon and Flipkart operate under this model.

Inventory Model (FDI Not Allowed)

Platform owns and sells products directly. This is restricted for foreign-invested companies. However, companies with 100% Indian ownership can operate this model.

Key Compliance Points

  • No exclusive deals with specific sellers
  • No cashbacks or discounts funded by the marketplace entity
  • Marketplace cannot own more than 25% in any seller
  • Quarterly compliance reporting recommended

Navigate e-commerce FDI rules. Accountify's compliance team ensures you stay on the right side of regulations.

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Tags:

#e-commerce FDI India
#marketplace model India
#online retail FDI rules
#FDI Press Note 2 2018

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