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DPIIT asks ecommerce companies to upload FDI compliance certifications

Friday 30 August 2019 | 10:20 AM CET

The Indian government has asked ecommerce companies Amazon and Flipkart to upload statutory audit reports certifying proving that they are compliant with the FDI rules.

According to Medianama, the reports should be uploaded on the company websites by 30 September 2019.

DPIIT revised its guidelines on FDI in ecommerce and set out new rules for marketplaces and vendors. The new guidelines came into effect on 1 February 2019.

The updated policy does not allow marketplaces to exercise control over the inventory of vendors on their platforms. The new policy reiterates that if a vendor sells over 25% of goods on the ecommerce marketplace, the marketplace will become an inventory based model in which FDI in not allowed. To be clear, the earlier FDI in ecommerce policy from 2017 had the same 25% cap on vendor sales, but now it places the responsibility on the marketplaces to ensure this does not happen.

Moreover, if a marketplace has an equity stake in a vendor/seller, the vendor is not permitted to sell its products on the marketplace. Warranty and guarantee of goods and services sold on marketplaces is the responsibility of the seller/vendor, and not the platform.

The marketplace cannot influence prices directly or indirectly and has to offer a level-playing field all vendors/players. Platforms will provide cashbacks, fulfillment, logistics, warehousing, advertisements, marketing, payments, finance, etc across all vendors.

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