FDI in E-Commerce: No Difference in Rules for Offline and Online Retailers – Nirmala Sitharaman

The seemingly never ending confusion about FDI rules in online retail has come to an end. Indian Commerce Minister, Nirmala Sitharaman has announced that the same rules for FDI, as multi-brand retail, would apply to e-commerce.

As reported by Business Standard, the minister said that “FDI is banned in multi-brand retail and the same applies to e-commerce also,”. The current ruling Goverment has been fiddling around with this subject ever since it came to power, with a report indicating that FDI in e-commerce might get allowed in June, to BJP’s recent adamant opposition to the same.

Recently Enforcement Directorate found Flipkart guilty of FEMA violations and is coming after it with a heavy fine. It is also going after other e-commerce companies with similar allegations.

In order to skirt around the issue of violating FDI norms in multi-brand retail, players like Flipkart changed their B2C strategy and started operating like a marketplace, with different sellers fulfilling customer orders. However now it seems that many companies with foreign investments, dealing like this, will come under the ED radar.

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