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100% FDI allowed in online marketplaces

100 per cent Foreign Direct Investment (FDI) in online marketplaces is now allowed, reported the PTI.

Websites such as Flipkart, Amazon and others which provide a platform to various sellers to sell their products can now take 100 per cent FDI, but any websites owned by the sellers themselves have not yet been given this allowance. The former is the “marketplace model”, whereas the latter is the “inventory-based model” as defined by the Department of Industrial Policy and Promotion (DIPP).

The DIPP has clarified that an e-commerce firm follows the marketplace model only if less than 25 per cent of its total sales are from one vendor or such vendor’s group companies.The government has already allowed 100 per cent FDI in business-to-business e-commerce.

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