FDI in retail not for online trade, says DIPP

The opening up of multi-brand retail to foreign companies does not apply to online e-commerce platforms but only to brick-and-mortar stores, the Department of Industrial Policy and Promotions (DIPP) has clarified. The entry of foreign-owned virtual stores continues to be restricted.

Foreign firms which are merely a ''listing platform for brands'' are welcome to operate in India. But foreign firms that buy and sell goods or services are still banned from conducting activities in India, the DIPP clarified last week. ''E-commerce activities refer to the activity of buying and selling by a company through the e-commerce platform,'' it said.

Currently foreign e-commerce companies engage only in business-to-business (B2B) operations and not in retail trading. This means that companies like Wal-Mart can open shops with an Indian partner, but its online arm is still barred.

Companies such as eBay operate in India as they are merely listing platforms, but companies like Amazon cannot enter India as they actually buy and sell goods.