As per the Economic Survey 2017-18, the electronic commerce (e-commerce) market in India is estimated at USD 33 billion, with a 19.1 percent growth rate in 2016-17. As per the National Association of Software and Services Companies (NASSCOM) Strategic Review 2018, in the Information Technology and Business Process Management (IT-BPM) sector in India, the Indian e-commerce market was USD 33 billion in 2017-18 and reached USD 38.5 billion, growing at a rate of about 17% in the financial year 2018-19.

As per extant Foreign Direct Investment (FDI) policy, FDI up to 100% is permitted under automatic route in companies engaged in e-commerce provided that such company engaged only in Business to Business (B2B) e-commerce. Further, 100% FDI under automatic route is permitted in marketplace model of e-commerce but FDI is not permitted in inventory based model of e-commerce. Moreover, an entity is permitted to undertake retail trading through e-commerce under the following circumstances, subject to FDI policy provisions:

• A manufacturer is permitted to sell its products manufactured in India through e-commerce retail.
• A single brand retail trading entity operating through brick and mortar stores is permitted to undertake retail trading through e-commerce.
• A food product retail trading entity is allowed to undertake retail trading, including through e-commerce, in respect of food products manufactured and/or produced in India.

For foreign investment in sectors under automatic route, no prior permission of Government of India is required.

FDI in retail has been allowed in a calibrated manner after having intensive consultations with stakeholders including concerned Ministries, Departments, State Governments, apex industry chambers, Associations and other organizations taking into consideration their views/comments.

This information was given by Minister of State for Commerce & Industry C. R.  Chaudhary in a written reply in the Lok Sabha today. 

Foreign Direct Investment policy permits full automatic route FDI for B2B and marketplace e commerce while barring inventory models. Foreign Direct Investment policy permits full foreign investment under the automatic route for companies engaged exclusively in Business to Business e commerce and for marketplace model e commerce, while FDI is not permitted in the inventory based model. Retail e commerce is allowed for manufacturers selling products made in India, single brand retailers with brick and mortar operations, and entities retailing food products manufactured or produced in India; automatic route sectors require no prior government approval.