India: Gov proposes to create a special group to ensure ecommerce FDI compliance

India proposed to create a special group to keep tabs on any violation of its foreign direct investment policy guidelines (FDI guidelines) by online retail platforms such as Amazon, Flipkart and Myntra even as it contemplates widening the definition of ecommerce under the framework, reported the Economic Times.

The separate wing comprising officials from the industry department and the Enforcement Directorate will handle any violations, strengthening the implementation and enforcement of the guidelines. The wing will be a temporary solution to address misuse of the policy while the government prepares a national policy on ecommerce to improve regulation of the sector.

“The separate wing will be a transient measure to enforce the existing policy and handle any grievance related to the implementation of Press Note 3,” said an official present at the meeting. Press Note 3 details the guidelines for foreign investment in ecommerce.

India will broaden the definition of ecommerce to include any buying, selling, marketing, distribution and delivery of goods and services through electronic means and come out with a single legislation for ecommerce, an inter-ministerial group decided on Friday, July 6.

India allows 100% FDI in the marketplace model of ecommerce, where online retailers provide a platform for exchange but carry no inventory, and disallows FDI in the inventory-based model. Marketplace operators cannot hold inventory and sell products on their platform – they can only facilitate the process for other vendors.

Full Content: The Economic Times

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