With reference to foreign-owned e-commerce firms operating in India, which of the following statements is/are correct? 1. They can sell their own goods in addition to offering their platforms as market-places. 2. The degree to which they can own big sellers on their platforms is limited. Select the correct answer using the code given below:
A
1 only
B
2 only
C
Both 1 and 2
D
Neither 1 nor 2
Correct answer
Explanation
Under India's FDI policy (Press Note 2 of 2018), foreign investment in e-commerce is allowed only in the marketplace model, not the inventory model, so foreign-owned platforms cannot sell their own goods (statement 1 is wrong). The same rules bar any vendor in which the marketplace or its group companies hold equity, or whose inventory they control, from selling on the platform, so owning sellers is prohibited, not merely limited (statement 2 is wrong). So neither statement is correct.
E-commerce PolicyFDI in E-commerce, Marketplace ModelForeign-owned e-commerce firmsIndiasell own goodsplatformsmarket-placesbig sellerslimited ownership