UPSC Prelims 2022 · Question 6 of 98
UPSC Prelims 2022 question on Foreign E Commerce Firms Rules
- ExamUPSC CSE
- Year2022
- PaperGeneral Studies Paper I
- SubjectIndian Economy
- TopicIndustry
- DifficultyMedium
- TypeStatement
With reference to foreign-owned e-commerce firms, operating in India, which of the following statements is/are correct?
1. They can sell their own goods in addition to offering their platforms as marketplaces.
2. The degree to which they can own big sellers on their platforms is limited.
Select the correct answer using the code given below:
Show answer
Answer: B. 2 only
Verdict
Correct statement: 2 only → Option (b).
Statement by statement
Statement 1 – INCORRECT: Consumer Protection (E-Commerce) Rules, 2020 define e-commerce entity (also foreign owned) as any person who owns, operates or manages digital or electronic facility or platform for electronic commerce, but does NOT include a seller offering his goods or services for sale on a marketplace e-commerce entity. Hence foreign-owned e-commerce firms cannot sell their own goods on their marketplace platforms.
Statement 2 – CORRECT: According to FDI guidelines on E-Commerce, inventory of a vendor will be deemed to be controlled by an e-commerce marketplace entity if more than 25% of purchases of such vendor are from the marketplace entity or its group companies. Hence the degree to which they can own big sellers is limited.