Q6.
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 marketplaces. 2. The degree to which they can own big sellers on their platforms is limited. Select the correct answer using the code given below:
Answer
B
Explanation
Statement 1 is incorrect: FDI is not permitted in inventory-based model of e-commerce for foreign-owned entities. E-commerce entity providing a marketplace will not exercise ownership or control over the inventory. Statement 2 is correct: Inventory of a vendor will be deemed to be controlled by the e-commerce marketplace entity if more than 25% of purchases of such vendor are from the marketplace entity or its group companies, limiting the degree to which they can own big sellers.