Lok Sabha Question No. 1050 (UNSTARRED), answered on 2018-12-17
Subject: Foreign Companies in e-Commerce
Ministry: COMMERCE AND INDUSTRY
Asked by: C. N. JAYADEVAN, BALASUBRAMANIAM SENGUTTUVAN

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY

## DEPARTMENT OF INDUSTRIAL POLICY & PROMOTION

## LOK SABHA

## UNSTARRED QUESTION NO. 1050. TO BE ANSWERED ON MONDAY, THE 17 TH  DECEMBER, 2018.

## FOREIGN COMPANIES IN E-COMMERCE

## 1050.  SHRI C.N. JAYADEVAN: SHRI B. SENGUTTUVAN:

Will the Minister of COMMERCE AND INDUSTRY be pleased to state:

## वाणिज्य एवं उद्योग मंत्री

- (a) whether the e-commerce sector in India is poised for exponential growth in the country in the coming years and if so, the details thereof;
- (b) whether  of late the Ministry  has given clearance to any  international e-commerce company to invest in India in online retail market and if so, the details thereof, company-wise;
- (c) whether  the  advent  of  foreign  investors  would  affect  the  Indian  origin  e-tail companies and if so, the details thereof;
- (d) whether the Ministry  contemplates any measures to protect Indian interests and if so, the details thereof; and
- (e) whether the foreign investors, like Walmart, who have invested in companies like Flipkart, are forcing the Indian CEOs out of their leadership positions and if  so,  the  details  thereof  along  with  the  corrective  steps  taken  by  the Government in this regard?

## ANSWER

## वाणिज् य एवं उद्योग मंत्रालय में राज् यमंत्री (श्री सी.आर. चौधरी) THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE & INDUSTRY (SHRI C.R. CHAUDHARY)

- (a): As per the  Economic  Survey  2017-18, the electronic commerce (e-commerce) market in India is estimated at USD 33 billion, with a 19.1 percent  growth  rate  in  2016-17.  As  per  the  National  Association  of Software and Services Companies (NASSCOM) Strategic Review 2018, in  the  Information  Technology  and  Business  Process  Management (IT-BPM) sector in  India,  the  Indian  e-commerce market  was  USD  33 billion  in  2017-18  and  reached  USD  38.5  billion,  growing  at  a  rate  of about 17% in the financial year 2018-19.
- (b): As per extant Foreign Direct Investment (FDI) policy, FDI up to 100% is permitted under automatic route in companies engaged in e-commerce provided  that  such  company  engaged  only  in  Business  to  Business (B2B)  e-commerce.  Further,  100%  FDI  under  automatic  route  is permitted in marketplace model of e-commerce but FDI is not permitted in  inventory  based  model  of  e-commerce.  Moreover,  an  entity  is permitted  to  undertake  retail  trading  through  e-commerce  under  the following circumstances, subject to FDI policy provisions:
- i) A manufacturer is permitted to sell its products manufactured in India through e-commerce retail.
- ii) A single brand retail trading entity operating through brick and mortar stores is permitted to undertake retail trading through ecommerce.
- iii) A food product retail trading entity is allowed to undertake retail trading, including through e-commerce,  in  respect of food products manufactured and/or produced in India.

For  foreign  investment  in  sectors  under  automatic  route,  no  prior permission of Government of India is required.

- (c) & (d): FDI  in  retail  has  been  allowed  in  a  calibrated  manner  after  having intensive consultations with stakeholders including concerned Ministries/  Departments,  State  Governments, apex industry chambers, Associations  and  other  organizations  taking  into  consideration  their views/comments.
- (e): No such information is available with the Government.

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