India: FDI to receive red light for ecommerce business

Monday 25 August 2014 13:43 CET | News

Nirmala Sitharaman, Indian Commerce Minister, has claimed that the Foreign Direct Investment (FDI) will fall under the same regulation that is enforced for multi-brand retail, reports citing news agency Business Standard.

Sitharaman has informed that the current regulation bans FDI business in ecommerce and multi-brand retail.

The current ruling goverment has been undecided whether to ban or not FDI, with recent rumours indicating that FDI might be allowed for ecommerce.

Recently, the Enforcement Directorate has charged Flipkart with violation of Foreign Exchange Management Act (FEMA) regulation.

Therefore, Flipkart has changed its B2C ecommerce strategy and has started operating like a marketplace, with different sellers fulfilling customer orders in order to avoid the issue of violating FDI norms in multi-brand retail.

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Keywords: India, FDI, EMEA, Commerce Minister, regulation, multi-brand retail, ecommerce, online sales, customer, regulation
Categories: Payments & Commerce
Countries: World
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