Govt to review FDI rules for e-commerce; set up committee

The government has decided to set up a committee to look into all issues including foreign direct investment norms pertaining to the fast growing e-commerce industry in the country.

The committee will be headed by the NITI Aayog CEO. The other members in the panel include officials from commerce and industry ministry and department of electronics and IT among others.

"It will look at all the issues including FDI pertaining to the e-commerce sector. The committee would suggest ways to further promote the growth of the sector," an official said.

Representatives from four states including Maharashtra and Karnataka are also members of the panel. Some e-commerce firms are facing taxation related problems in few states.

Setting up of this panel also assumes significance as the government has recently permitted 100% FDI in food processing sector. There is also an issues related to e-commerce players selling pharmaceuticals.

The Department of Industrial Policy and Promotion (DIPP) has allowed 100% FDI through automatic route in the marketplace format of e-commerce retailing in March.

As per the guidelines, FDI has not been permitted in inventory-based model of e-commerce.