The following steps have been taken for effective expansion and foreign investment promotion of e-commerce in India:

 (i) the FDI policy provides FDI up to 100% under the automatic route in B2B e-commerce activities.

 (ii) Finance Minister, in his Budget Speech, given on 10.7.2014, has made following statement:

“FDI in the manufacturing sector is today on the automatic route. The manufacturing units will be allowed to sell its products through retail including e-commerce platforms without any additional approval.”

As per regulation framed under the Foreign Exchange Management Act, (FEMA) 1999, 100% FDI is permitted under automatic route only in B2B e-commerce activities and not in retail trading. FDI is also not permitted in retail trading, in any form, by means of e-commerce, for companies engaged in the activity of single/multi brand retail trading.

 This information was given by the Minister of State (Independent Charge) in the Ministry of Commerce & Industry Smt. Nirmala Sitharaman in a written reply in Rajya Sabha today.

FDI in e-commerce limited to B2B activities; retail trading by e-commerce remains prohibited under current foreign exchange regulations. The policy establishes that Foreign Direct Investment is permitted on the automatic route only for B2B e-commerce, while FDI and retail trading via e-commerce remain prohibited for companies engaged in single- or multi-brand retail trading under FEMA-derived regulations; manufacturing units may sell through retail including e-commerce, but that does not alter the foreign exchange regulatory restriction on e-commerce retail.