100% FDI on e-commerce is allowed under automatic route for Business-to-Business (B2B) e-commerce whereas FDI for Business-to-Consumer (B2C) e-commerce is not allowed. However, FDI in B2C e-commerce is permitted where it is in the form of individual retail store and goods are manufactured in India.
There are two basic models for e-commerce which are ‘inventory based model of e-commerce’ where goods and services owned by the entities are owned and sold to the customers directly and ‘marketplace model of e-commerce’ where entity works as a facilitator between buyer and seller though the use of information technology.
FDI on ‘inventory based model of e-commerce’ is not permitted in India.
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