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ARTICLE · 27 MARCH 2018

FDI In E-Commerce

Shardul Amarchand Mangaldas & Co
Shardul Amarchand Mangaldas & Co
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Shardul Amarchand Mangaldas & Co

Shardul Amarchand Mangaldas & Co

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The Consolidated FDI Policy (FDI Policy) states that 100% FDI is allowed under automatic route in e-commerce activities.

IndiaCorporate/Commercial Law
Shardul Amarchand Mangaldas & Co
Shardul Amarchand Mangaldas & Co
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The Consolidated FDI Policy (FDI Policy) states that 100% FDI is allowed under automatic route in e-commerce activities. While, at first blush, the policy pertaining to e-commerce seems straightforward, a detailed analysis of various conditions prescribed in the same FDI Policy make it clear that the position is infinitely more nuanced than it first appears. This article aims to deal with all aspects of FDI in e-commerce viz. FDI in e-commerce entities, as well as manufacturing and trading entities that engage in e-commerce.

E-commerce was, for the first time, categorised as 'inventory based model of e-commerce' and 'marketplace based model of e-commerce' in Press Note No. 3 (2016 Series) issued by DIPP on 29 March 2016 (PN 3). Prior to this, erstwhile FDI Policies merely stated that e-commerce entities can only undertake B2B e-commerce and not B2C e-commerce. More than a decade after eBay started its operations India, PN 3 categorically clarified that 100% FDI under

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