With reference to foreign-owned e-commerce firms operating in India, which of the following statements is/are correct ?
- 1.They can sell their own goods in addition to offering their platforms as market-places.
- 2.The degree to which they can own big sellers on their platforms is limited.
Select the correct answer using the code given below :
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Answer: D. Statement 1 is wrong: FDI rules (Press Note 2 of 2018) allow foreign-owned firms only the marketplace model; they cannot hold inventory and sell their own goods. Statement 2 is wrong as per the key: a vendor in which the e-commerce entity or its group companies hold equity is not allowed to sell on the platform at all, so it is a ban, not just a limit. So neither.
Watch for: Statement 2 sounds broadly true; the catch is that the rule is a prohibition, not a cap on the 'degree' of ownership.
Why the other options are wrong
- A. Wrong because foreign-owned e-commerce firms cannot follow the inventory model in India.
- B. Wrong because ownership of sellers is barred, not merely limited, under the 2018 rules.
- C. Wrong because neither statement is correct.
Source to check: DPIIT Press Note 2 (2018 Series) on FDI in e-commerce; Consolidated FDI Policy, para 5.2.15.2
Answer from the official UPSC key. Written and fact-checked by AI against the official key. Spotted a mistake? Report it.