FDI restrictions in e commerce bar platform controlled inventory or equity tied sellers from listing, requiring compliance and auditor reporting.
Press Note 2 of 2018 refines the marketplace versus inventory based distinction, allows 100% FDI only in genuine marketplace models, and bars marketplace entities from owning or controlling vendor inventory. It introduces a deeming provision treating vendor inventory as controlled if more than 25 percent of a vendor's purchases are from the marketplace or its group companies, prohibits entities with marketplace equity participation from selling on that platform, bans exclusivity mandates, requires arm's length non discriminatory provision of services by group companies, and mandates annual auditor certified compliance reporting to the central bank. (AI Summary)