Consider the following statements regarding E Commerce 1 A 100 FDI is permitted in the market place ...........

Economic Affairs Foreign Investment

Consider the following statements regarding E-Commerce:

1. A 100% FDI is permitted in the market-place based Ecommerce models.

2. In a marketplace-based model, the seller and platform owner are separate entities.

3. The recent e-commerce rules, 2020 are applicable only to the market-place based operators.

Which of the statements given above is/are correct?

1 and 2 only

2 and 3 only

1 and 3 only

1, 2, and 3

Explanation:

Statement 1 is correct: There are two kinds of E-commerce models: Market-based and Inventory-based models. In the market-based model, the role of the E-commerce entity is only to provide the web platform to connect the sellers and buyers. It does not own the goods and service and merely acts as a facilitator of the transactions between the buyer and the seller. 100% FDI is permitted in the market-based E-commerce model. The inventory-based model focuses on the owning and selling of the goods and services directly by the E-commerce entity. There is no FDI permitted here.
Statement 2 is correct: In the market-place models the sellers and facilitator of sale through a portal are different entities. This model is beneficial as it connects the local vendors to the customers around the country through an online portal.
Statement 3 is incorrect: The recent Ecommerce rules, 2020 are applicable to all the E-commerce entities providing goods and services in India, whether registered in India or outside India. These rules seek to strengthen the grievance redressal of the customers.