Government Mulls Tweaking FDI Norms In E-Commerce Sector
Merchants display placards and shout slogans during a sit-in protest at Sadar Bazaar in New Delhi, India. (Photographer: Anindito Mukherjee/Bloomberg)  

Government Mulls Tweaking FDI Norms In E-Commerce Sector

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The government is considering tweaking norms for e-commerce companies having foreign direct investment to prohibit them from selling products of vendors in which these online marketplaces or their parent firms hold stake indirectly, sources told PTI.

In December 2018, the government had barred the online marketplace players from selling products of companies in which they have a direct stake.

As per the current policy, 100% FDI is permitted in marketplace e-commerce but it is prohibited in inventory-based activities.

The consideration assumes significance as domestic traders body Confederation of All India Traders has alleged that these companies are violating Foreign Exchange Management Act and FDI rules.

According to CAIT, the commerce and industry ministry has forwarded representations of alleged violations by Amazon.com Inc. and Walmart Inc.’s Flipkart to the Enforcement Directorate and the Reserve Bank of India for "necessary action".

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