With reference to foreign-owned e-commerce firms operating in India, which of the following statements is/are correct?
- They can sell their own good in addition to offering their platforms as market-places
- The degree to which they can own big sellers on their platforms is limited
Select the correct answer using the code given below:
- 1 only
- 2 only
- Both 1 and 2
- Neither 1 nor 2
Explanation:
In reference to foreign-owned e-commerce firms operating in India, the correct answer is 2 only. Here’s the explanation:
- Foreign-owned e-commerce firms cannot sell their own goods in addition to offering their platforms as marketplaces. According to the Foreign Direct Investment (FDI) policy on e-commerce, a foreign-owned e-commerce entity, whether an operator or marketplace, is prohibited from selling its own products or inventory on its platform.
- The degree to which foreign-owned e-commerce firms can own big sellers on their platforms is limited. The FDI policy restricts e-commerce firms from exercising ownership or control over the inventory of sellers, and there are caps on the percentage of inventory that a vendor can sell through a marketplace entity or its group companies.
