Even though India allows 100% foreign direct investment (FDI) in business-to-business (B2B) ecommerce, FDI in business-to-consumer (B2C) ecommerce remains strictly prohibited and bound by FDI restrictions on the retail sector more generally.
This forces retailers such as Amazon and eBay to establish a ‘marketplace model’, where local independent merchants sell goods directly to consumers, and the platform earns commission from those merchants.
Currently, 12 Indian states permit investment in multi-brand retail by foreign companies. However, nation-wide FDI in multi-brand retail only accounts for 51%.
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