Explanation:

Consumer Protection (E-Commerce) Rules, 2020 define e-commerce entity (also foreign owned) as any person who owns, operates or manages digital or electronic facility or platform for electronic commerce, but does not include a seller offering his goods or services for sale on a marketplace ecommerce entity. Hence statement 1 is not correct

Marketplace based model of e -commerce means providing an IT platform by an e -commerce entity on a digital & electronic network to act as a facilitator between buyer and seller. On other hand, 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. However, FDI is not permitted in inventory based model of e -commerce.

According to guidelines for FDI (Foreign Direct Investme nt) on E -Commerce, E -commerce entity providing a marketplace will not exercise ownership or control over the inventory i.e. goods purported to be sold. Such an ownership or control over the inventory will render the business into inventory based model. Inventory of a vendor will be deemed to be controlled by e -commerce marketplace entity if more than 25% of purchases of such vendor are from the marketplace entity or its group companies. Hence statement 2 is correct