No. FEMA.387/2017-RB
Foreign Exchange Management (Transfer
or Issue of Security by a Person Resident outside India) (Fourth Amendment)
Regulations, 2017
Now 100% FDI is Allowed for B2B E-commerce
activities
“(ii E)
E-commerce:
a. ‘E-commerce’ means buying and selling of goods and
services including digital products over digital & electronic network.
b. ‘E-commerce entity’
means a company incorporated under the Companies Act, 1956 or the Companies
Act, 2013 or a foreign company covered under section 2 (42) of the Companies
Act, 2013 or an office, branch or agency in India as provided in Section 2 (v)
(iii) of FEMA 1999, owned or controlled by a person resident outside India and
conducting the e-commerce business.
c. ‘Inventory based model of e-commerce’ means an e-commerce
activity where inventory of goods and services is owned by e-commerce entity
and is sold to the consumers directly.
d. ‘Market place model of e-commerce’ means providing of an
information technology platform by an ecommerce entity on a digital &
electronic network to act as a facilitator between buyer and seller.”
3. Amendment of Schedule 1 In the Foreign Exchange Management
(Transfer or Issue of Security by a Person Resident outside India) Regulations,
2000, (Notification No. FEMA 20/2000-RB dated 3rd May 2000), in Schedule 1, in
the existing Annex B, the existing entry 16.2 shall be substituted by the
following:
16.2
|
E-Commerce
|
% of equity/FDI Cap
|
Entry route
|
16.2.1
|
B2B E-commerce activities
|
100 %
|
Automatic
|
Such companies would engage only in Business to
Business (B2B) e-commerce and not in retail trading, inter alia implying that
existing restrictions on FDI in domestic trading would be applicable to
e-commerce as well.
16.2.2
|
Market place model of e-commerce
|
100 %
|
Automatic
|
16.2.3
|
Other Conditions
|
a) Digital
& electronic network will include network of computers, television channels
and any other internet application used in automated manner such as web pages,
extranets, mobiles etc.
b) Marketplace e-commerce entity will be
permitted to enter into transactions with sellers registered on its platform on
B2B basis.
c) E-commerce marketplace may provide support
services to sellers in respect of warehousing, logistics, order fulfilment,
call centre, payment collection and other services.
d)
E-commerce entity providing a marketplace will not exercise ownership over the
inventory i.e. goods purported to be sold. Such an ownership over the inventory
will render the business into inventory based model.
e) An
e-commerce entity will not permit more than 25% of the sales value on financial
year basis affected through its marketplace from one vendor or their group
companies.
f)
Goods/services made available for sale electronically on website should clearly
provide name, address and other contact details of the seller. Post sales,
delivery of goods to the customers and customer satisfaction will be
responsibility of the seller.
g) Payments
for sale may be facilitated by the e-commerce entity in conformity with the
guidelines of the Reserve Bank of India.
h) Any warranty /guarantee of goods and
services sold will be responsibility of the seller.
i) E-commerce entities providing marketplace
will not directly or indirectly influence the sale price of goods or services
and shall maintain level playing field.
j) Guidelines on cash and carry wholesale
trading as given in S.No. 16.1.2 (stated above) shall apply to B2B e-commerce
activities.
Note: FDI is not permitted in
inventory based model of e-commerce
16.2.4
|
Sale of services through e-commerce
shall be under automatic route subject to the sector specific conditions,
applicable laws/regulations, security and other conditionalities.
|
Reference
G.S.R. 224 (E).—In exercise of the powers
conferred by clause (b) of sub-section (3) of Section 6 and Section 47 of the
Foreign Exchange Management Act, 1999 (42 of 1999), the Reserve Bank of India
hereby makes the following amendments in the Foreign Exchange Management
(Transfer or issue of Security by a Person Resident outside India) Regulations,
2000 (Notification No. FEMA. 20/2000-RB dated 3rd May 2000) namely:-
