Mar 30, 2016 08:20 AM EDT
Indian Department of Industrial Policy and Promotion (DIPP) has announced on Tuesday that online market places can get 100% foreign direct investment (FDI). The announcement appears as part of new set of guidelines that aims at clearly defining overseas investment rules in the booming ecommerce sector of India.
Indian online retail portals such as Flipkart and Snapdeal have attained attraction drawing valuations. The ecommerce portals have structured themselves as aggregators offering marketplaces for people to choose and buy products of companies displaying goods for sale through these gateways. In addition to local ecommerce vendors, global retailers like Amazon and eBay have also started operations in India through their subsidiaries, reports Hindustan Times.
India has started opening up its retail sector in 2011 after years of conservative policies. But the country hasn't laid down explicit rules regulating FDI in the fastest growing sector. According to the commerce ministry notification issued on Tuesday, FDI may also be used in providing services including warehousing, inventory and payment processing to the merchants, reports Reuters.
However, the notification doesn't allow the ecommerce companies in influencing prices of the goods sold through their websites. Furthermore, it restricts the online marketplaces to procure not more than 25% of the goods sold from a single merchant.
The DIPP notification also furnishes definition of 'ecommerce', 'inventory based model' and 'market place model' to bring clarity in this sector. The market place model represents an IT platform by an ecommerce entity on a digital and electronic network.
The model acts as a facilitator between buyer and seller. Meanwhile, the inventory based model signifies ecommerce activity centering inventory and services owned by ecommerce entity. The model allows selling of goods direct to the consumers, clarifies India TV citing the new guideline as the source.
Global giant Amazon and foreign funded local vendors like Flipkart and Snapdeal do not own inventory. Instead, they act as platforms connecting buyers and sellers through support services for a commission and hence will have to follow the market place model, according to the new guideline.
An explicit position from the government formulating ecommerce has long been overdue in India. Hence, circulation of guidelines including specific clarification has been welcomed by Vivek Gupta, a partner at BMR Advisors. Merrill Lynch from Bank of America has forecast that Indian ecommerce business will grow to $220 billion by 2025 from about $11 billion of sales revenue recorded last year.
Indian local ecommerce vendors Flipkart and Snapdeal have received foreign funds despite absence of guidelines on foreign direct investment in this sector. Following a widespread call from the industry insiders, Indian foreign ministry on Tuesday has issued a new guideline for regulating the fastest growing sector. The booming industry is expected to grow up to $220 billion by 2025 in terms of sales revenue.
If you think that the micro accounts are useful only for beginners who may not be able to cope with the fast dynamics of changing quotes on trading platforms, then this is not so. Professionalism grows out of these cent accounts.
Journalists love their jobs because they get to interact with people from all sorts of backgrounds and expertises, then turn around and share their knowledge with the world.
As the metaverse takes over more of our digital lives, the commoditization of all aspects of our virtual beings becomes more and more of a reality.
Rustam Gilfanov is a famous IT businessman, a founder of a large IT company, and a partner of the LongeVC Fund.
In the currency trading business, many individuals make mistakes. Since most individuals join this profession with too much excitement, they forget about efficient strategies. Instead of controlling their investment and execution process, most individuals make poor choices for trading.
In today's digital world, more and more people are investing in cryptocurrencies. These digital tokens have exploded into popularity over the past few years, and have grown to the point that there are now nearly over 6,000 of them, according to Statista.
Following the pandemic, natural calamities, and major employment shifts, a startling new study on the online news site News Nation shows that 1 in 4 Americans don't have an emergency fund.
Generational wealth is a facet of wealth management that is often misunderstood. Labeled trust fund babies, rich kids, and lucky breaks, those who receive an inheritance from families are rare.
Social media has successfully made it to the mainstream consciousness of over half the global population. DataReportal's latest study shows that over 4.33 billion people worldwide are using some form of social networking site this year. That's why it's no wonder many tech companies are interested in investing or forming the next Facebook, Twitter, or YouTube to capture the hearts and minds of the general population.