Prelims 2022 · Economy · Question 6
With reference to foreign-owned e-commerce firms operating in India, which of the following statements is/are correct?
- They can sell their own goods in addition to offering their platforms as marketplaces.
- The degree to which they can own big sellers on their platforms is limited.
Select the correct answer using the code given below:
Answer
2 only
1. Incorrect. Under India’s FDI policy, foreign-owned e-commerce firms in the marketplace model cannot undertake inventory-based retail by selling their own goods directly.
2. Correct. The rules restrict control over sellers; inventory of a vendor is deemed controlled by the marketplace entity if more than 25% of purchases are from the marketplace group, effectively limiting ownership/control over big sellers.
Therefore, only statement 2 is correct.