FDI Policy in E-Commerce
Marketplace vs. Inventory-Based Models
India's FDI framework for e-commerce distinguishes between two business models, and this distinction is central to how much foreign capital is permitted.
- Under Press Note 2 (2018 series), issued by the then-DIPP (now DPIIT) on 26 December 2018 and effective from 1 February 2019, up to 100% FDI is permitted under the automatic route in the marketplace model — where the e-commerce entity merely provides an IT platform connecting buyers and sellers.
- The same policy has historically prohibited FDI in the inventory-based model — where the e-commerce entity itself owns the inventory of goods sold directly to consumers — because of concerns that foreign-funded inventory models could undercut small retailers and violate multi-brand retail FDI restrictions.
- Additional marketplace-model conditions include a cap of 25% on a vendor's sales sourced from any single vendor/group entity, and mandatory annual compliance certification to the RBI.
● Tracked since July 23, 2026 · last seen August 07, 2026 · updates as the daily brief publishes
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