Centre mulls tweaking FDI norms in e-commerce sector

The government is considering to tweak norms for e-commerce companies having FDI to prohibit them from selling products of vendors in which these online marketplaces or their parent firms hold stake indirectly, according to sources.

In December 2018, the government had barred the online marketplace players from selling products of companies in which they have a direct stake.

As per the current policy, 100 percent FDI (foreign direct investment) is permitted in marketplace e-commerce but it is prohibited in inventory-based activities.

The consideration assumes significance as domestic traders body Confederation of All India Traders (CAIT) has alleged that these companies are violating FEMA and FDI rules.

According to CAIT, the commerce and industry ministry has forwarded representations of alleged violations by Amazon and Flipkart to the Enforcement Directorate and the Reserve Bank for "necessary action".