100% FDI allowed in online retail under new rules: Centre to HC

The Centre on Thursday told the Delhi High Court that it has issued a press note in March this year clarifying that 100% foreign direct investment (FDI) through automatic route was permissible in online retails running under 'marketplace model'.

The submission was made before Justice Rajiv Sahai Endlaw by Additional Solicitor General (ASG) Sanjay Jain who said that in view of the March 29 press note, the plea of All India Footwear Manufacturers and Retailers Association against FDI in e-commerce was "infructuous".

The petitioner Association, however, contended that FDI norms were still being violated despite the press note and sought time from the court to consider what course of action to take.

The bench, thereafter, listed the matter for hearing on May 23, when the Association will tell the court whether they intend to challenge the press note by amending the current petition or by filing a fresh one.

As per the press note, while 100% FDI is allowed in e-commerce following a marketplace model, such online retailers are restricted from more than 25% discount from one vendor.

The high court had in an earlier order directed the government to probe 21 e-commerce websites for alleged violation of FDI norms.