Government should reconsider its outdated restrictions on FDI in ecommerce

To be sure, the concerns of small traders should not be dismissed. But protecting them need not mean stifling progress permanently

The Ministry of Commerce and Industry has reportedly circulated a proposal among different departments on allowing foreign direct investment (FDI) in inventory-based ecommerce, albeit limited to export operations. In a way, this recognises that ecommerce is not just a marketplace. Rather, it is an integrated supply chain linking manufacturing, logistics, and exports. Yet, by confining this liberalisation to exports alone, the government risks maintaining an artificial divide between domestic and global retail. Under the current framework, India allows 100 per cent FDI in the marketplace model, where ecommerce firms merely act as intermediaries connecting buyers and sellers. FDI remains barred