Regulations for foreign-owned e-commerce platforms in India
Question
With reference to foreign-owned e-commerce firms operating in India, which of the following statements is/are correct? Select the correct answer using the code given below:
- 1.
They can sell their own goods in addition to offering their platforms as market-places.
- 2.
The degree to which they can own big sellers on their platforms is limited.
Options
1 only
2 only
Both 1 and 2
Neither 1 nor 2
Explanation
Statement 1 is incorrect; under India's strict FDI rules for e-commerce, foreign-owned marketplace models (like Amazon or Flipkart) are strictly prohibited from selling their own inventory directly on their platforms. Statement 2 is correct; FDI norms tightly limit the equity ownership the marketplace entity can hold in any vendor selling on that platform to prevent market manipulation and protect smaller domestic sellers.
Answer: (b).
Question details
Year
2022
Paper
GS Paper 1
Question
Q6
Subject
Economy
Sub-topic
External Sector & Trade
Type
Statement-based
Difficulty
Medium
Nature
Current-affairs-linked
Source hint
DPIIT FDI Policy Circular / E-commerce Marketplace Regulations
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