As per the extant FDI policy, FDI up to 100% under the automatic route is permitted in companies engaged in e-commerce provided that such companies would engage only in Business to Business (B2B) e-commerce. Further, it has been decided an entity will be permitted to undertake retail trading through e-commerce under the 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 in manufactures in India, in of value, at least 70% of its products in house, and sources, at most 30% from Indian manufacturers.

The Government, with a view to simplify and liberalise FDI policy and to ensure that India remains increasingly attractive and investor-friendly investment destination, undertakes stakeholders consultations with concerned Ministries/ Departments, Apex Industries Chambers and other organizations. Consultations, in this regard, were held with the stakeholders including States and industry representatives.

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 Lok Sabha today.

FDI in e commerce: full automatic permission for B2B; retail allowed subject to manufacturer and single brand conditions. FDI in the e commerce sector permits 100% under the automatic route for B2B e commerce. Retail e commerce is allowed only where: a manufacturer sells its own India made products online; a single brand retailer with physical stores sells online; or an Indian manufacturer (the investee owning the Indian brand and conducting the majority of manufacturing in India while sourcing the remainder from Indian manufacturers) sells its single brand products through e commerce. Stakeholder consultations informed the policy.