E-Commerce
Electronic commerce is burgeoning as a means to doing business at a very rapid rate and is also showing every sign of continuing to expand. The rise of this new medium is attracting increasing attention by both private and public sector in order to remain upgraded and competitive so as to give 100 per cent services to their customers efficiently and effectively.
The E-commerce also involves using all round electronic methods and procedures to conduct business activities to achieve the organizational goal.
Electronic Commerce provides new opportunities for all overseas firms to access India’s domestic market and vice versa. In fact, it has set the ball rolling in India. Every service and information about the product is available just on a mouse click on computers.
FDI in E-Commerce
Enforcement Directorate conducts investigations under the Foreign Exchange Management Act, 1999 (FEMA) for possible contravention of FDI norms/ policy by various entities as and when any credible information is received in this regard. Based on the outcome of the investigation, appropriate action under the provision of FEMA is taken in such cases.
With a view to promote foreign investment, as per regulations framed under Foreign Exchange Management Act, (FEMA) 1999, FDI up to 100% under the automatic route is permitted in companies engaged in e-commerce provided that such companies would engage in Business to Business (B2B) e-commerce.
Foreign investment in Business to Customer (B2C) e-commerce activities has been opened in a calibrated manner and an entity is permitted to undertake retail trading through e-commerce under the following circumstances:
(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 e-commerce.
(iii) An Indian manufacturer is permitted to sell its own single brand products through e-commerce retail. Indian manufacturer would be the investee company, which is the owner of the Indian brand and which manufactures in India, in terms of value, at least 70% of its products in house, and sources, at most 30% from Indian manufacturers.
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