Govt allows 100% FDI in B2B E-Commerce: Nirmala Sitharaman

Government of India allowed Foreign Direct Investment (FDI) upto 100% under the automatic route is permitted in companies engaged in e-commerce provided that such companies would engage in Business to Business (B2B) e-commerce.

In a written reply to a question raised in Rajya Sabah , Ministry of Commerce & Industry Nirmala Sitharaman said that FDI in Business to Customer (B2C) e-commerce activities has been opened in a calibrated manner and an entity is permitted to undertake retail trading through e-commerce.

The Minister informed the house that the Government of India has allowed FDI in B2C e-commerce e-commerce under following circumstances:

(i) A manufacturer is permitted to sell its products manufactured in India through e-commerce retail.

(ii) A single brand retail trading entity operating through brick and mortar stores, is permitted to undertake retail trading through e-commerce.

(iii) An Indian manufacturer is permitted to sell its own single brand products through e-commerce retail. Indian manufacturer would be the investee company, which is the owner of the Indian brand and which manufactures in India, in terms of value, at least 70% of its products in house, and sources, at most 30% from Indian manufacturers.

She said in her reply, Enforcement Directorate conducts investigations under the Foreign Exchange Management Act, 1999 (FEMA) for possible contravention of FDI norms/ policy by various entities as and when any credible information is received in this regard. Based on the outcome of the investigation, appropriate action under the provision of FEMA is taken in such cases.