Finally, the Indian government seems to have realised, late in the day, that there are online marketplaces up and running inside its economy. The Indian ecommerce market is pegged to be at $25 Bn and finally there is some clarity from the government’s side on at least the definitions of what constitutes a “marketplace” or what is meant by “inventory” model of doing business online.
Today’s declaration by Department of Industrial Policy and Promotion (DIPP) sharing the guidelines on FDI in ecommerce i.e. permitting 100% foreign direct investment in Business to Customers (B2C) in marketplace model ecommerce. (read here)
“100% FDI is permitted under automatic route in marketplace model of ecommerce. FDI is not permitted in inventory-based model of ecommerce,” states Department of Industrial Policy and Promotion (DIPP) in a press note.
This move will demystify the cloudy ecosystem for sure, but this will not have any immediate impact on the Indian startup scenario as foreign players like Amazon and eBay have been operating their marketplaces in India, already.
But as always, everyone seemed to be gung-ho about an announcement which doesn’t impact life in any manner.
Welcoming the move Kunal Bahl, cofounder of Snapdeal, tweeted: