This Tuesday came with one of the biggest gift for Ecommerce as Indian Government allowed 100 per cent foreign direct investment (FDI).
Ecommerce started in the Country almost a decade ago and has grown in a big way, as the sector has got an estimated foreign investment of $10 billion since beginning. The progress will bring in greater foreign investment into a sector that is set to grow from $16 billion to $70 billion by 2020.
As per the guidelines issued by the Department of Industrial Policy and Promotion (DIPP) on FDI in e-commerce, it ensures that platform owners do not turn sellers.
While welcoming the guidelines, K Rajagopalan, CEO of Retailers Association of India said “the definitions in the notification will prevent marketplaces from behaving like pseudo retailers.”
100 per cent FDI is only for the marketplace format of e-commerce, where the company provides a platform for support services to sellers in warehousing and logistics, DIPP clarified. The limit of 25 per cent on sales by a vendor on a marketplace will also led to a broader base of vendors for a true marketplace.
Though there are still some restriction caps for the Ecommerce players but the move is surely going to depict the growth of the online marketplace in the country in coming years.