Govt amends FDI policy, allows inventory-based e-commerce for exports
UPSC / SSC current affairs note · Economy
Why in news
The government has amended the FDI policy to permit foreign direct investment in the inventory-based model of e-commerce, but only for exporting goods manufactured or produced in India. This move aims to boost exports and enhance global market access for Indian products.
Background
Previously, FDI in inventory-based e-commerce was not allowed to protect small retailers and ensure a level playing field. The new policy carves out an exception for export-oriented activities.
Key facts
FDI policy amended to allow foreign investment in inventory-based e-commerce model.
Permitted exclusively for exporting goods manufactured or produced in India.
Aims to boost Indian exports and global market access.
Inventory-based model involves e-commerce entities owning and selling goods directly.
Earlier, FDI was allowed only in marketplace e-commerce (platform connecting buyers and sellers).
Prelims pointers
- FDI: Foreign Direct Investment
- Inventory-based e-commerce: entity owns inventory and sells directly
- Marketplace e-commerce: platform facilitating transactions between third parties
- Policy change notified by Department for Promotion of Industry and Internal Trade (DPIIT)
- Part of FDI policy under Consolidated FDI Policy Circular
Mains angles
- GS3: Effects of liberalization on the economy, changes in industrial policy
- GS3: E-commerce regulations and impact on small retailers
- GS2: Government policies and interventions for export promotion