Through new rules, the government can prevent companies formed on behalf of online market place from trading in their own market place.
The government is preparing to tighten FDI rules in e-commerce. Through new rules, the government can prevent companies formed on behalf of online market place from trading in their own market place.
In a press note issued by the Department for Promotion of Industry and Internal Trade (DPIIT), it has been said that e-platform will not be allowed to buy stake in companies selling goods in its own platform.
‘All companies get equal opportunity at market place’
The department official has said that some e-commerce companies are not following the rules in this regard and are engaged in buying shares directly or indirectly in companies selling goods here. According to a press note brought in 2018, e-commerce companies were barred from selling goods on their platforms.
Those companies were also stopped from selling goods, whose inventory is controlled by these market places. It was said that if more than 25 percent of the purchase of a vendor is from the same market place, then it will be assumed that his inventory is being controlled by him.
Close watch on companies violating FDI rules
These decisions are being made to give equal opportunity to all companies in e-commerce. The Confederation of All India Traders has complained to the government several times that e-commerce companies are violating FDI rules.
He says that Market Place is not following this 25 per cent rule. Officials say that before making more stringent rules in this regard, all stakeholders related to e-commerce will meet. E-commerce cannot force a company to sell its goods only on their platform.
Nidhi Malviya is fun loving girl. She writes at NoobFeeds about various topics related to Finance, Technology, Business etc.