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Thursday, February 11, 2016

DIPP proposes 100% FDI in marketplace e-tail: Report

E-commerce companies, many of them unicorns (valued at $1 billion or more), could get full foreign direct investment (FDI) if a proposal of Department of Industrial Policy and Promotion (DIPP) passes muster, said a Business Standard report. Press Trust of India reported on Tuesday that the government was considering permitting 100 per cent FDI in the marketplace format of e-commerce to attract more foreign investments. This follows a recent meeting of top officials in DIPP, and the department of economic affairs and corporate affairs. A DIPP official told Business Standard that the proposal to allow FDI in e-commerce marketplace had been in the works for quite some time. It is believed that while DIPP is bullish on permitting no-holds-barred FDI in the sector, finance ministry is yet to give a green light to the proposal. If it does get a go-ahead, online marketplace FDI rules would be a part of the detailed guidelines to be issued soon. At present, while no foreign investment is permitted in e-commerce, there are no rules for those operating in the online marketplace format. Major online players, including Flipkart, Snapdeal,, Shopclues and Paytm, which are funded by marquee international investors, operate as marketplace firms, thereby skirting the FDI hurdle. E-commerce is growing at a fast clip in India. In 2015, the market had risen from USD 5 billion to USD 8 billion. A Goldman Sachs report has projected that e-commerce in India could breach the $100-billion mark by 2020.