INTERNATIONAL RESEARCH JOURNAL OF HUMANITIES,
ENGINEERING & PHARMACEUTICAL SCIENCES

The Indian e-commerce market has grown from $2.5 billion in 2009 to $6.3 billion in 2011 and $14 billion in 2012. There are 10 million online shoppers, expanding at an estimated compounded annual growth rate of 30% in India. E-commerce is estimated to grow to $200 billion by 2020 in India! These figures are enough to understand the potential of e-commerce business in India and why foreign players want Indian Government to allow FDI in online retail. At present, 100 per cent FDI is allowed only in business-to-business (B2B) e-commerce and not in retail trading. The government has earlier banned FDI in e-retail but now it is been given a second thought. The Department of Industrial Policy and Promotion (DIPP) has started the exercise on the matter and has prepared a draft note. At present, the Indian Government permits 100 percent FDI in cash and carry, online marketplaces, single brand retail as well as business-to-business (B2B) e-commerce. The Government also allowed up to 51 percent FDI in multi brand offline retailing last year. However, multi brand retailing in ecommerce and inventory led model is completely prohibited. In this paper I have explored the FDI regulations related to e-retailing, the support and criticisms it is receiving and its scope in Indian e-commerce market.