With reference to foreign-owned e-commerce firms operating in India, which of the following statements is/are correct?

  1. They can sell their own good in addition to offering their platforms as market-places
  2. The degree to which they can own big sellers on their platforms is limited

Select the correct answer using the code given below:

  1. 1 only
  2. 2 only
  3. Both 1 and 2
  4. 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:

  1. 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.
  2. 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.

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