This week, the government issued a clarification in response to all the confusion regarding the changes made by the Department of Industrial Policy and Promotion (DIPP) in the Foreign Direct Investment (FDI) policy.
- 01/02Page 1 of notification.(Photo Courtesy: dipp.gov.in)
- 02/02Page 2 of notification.(Photo Courtesy: dipp.gov.in)
In it's clarification, the DIPP specified that "FDI is not permitted in inventory based model of ecommerce, which amounts to multi-brand retail."
It further assured private labels that this policy does not impose any restriction on the nature of products to be sold on the marketplace.
Hence, e-commerce players like Flipkart, Amazon etc, can continue selling private labels on their websites.
“Concerns have been raised that Press Note 2/2018 prohibits sale of private label products through the marketplace. It is clarified that present policy does not impose any restriction on the nature of products which can be sold on the marketplace.”DIPP, in clarification.
According to CNBC TV18, 15 percent of overall revenues for e-commerce sites like Flipkart and Amazon is drawn from private labels.
(With inputs from CNBC TV18.)
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