The Commerce and Industry Ministry is considering a proposal to permit foreign direct investment (FDI) in the inventory-based model of e-commerce as part of the government’s strategy to push exports.

The ministry has sought feedback on the issue from various Central government departments on the issue in order to move ahead with the proposal.

Senior officials cite the example of China to highlight the huge potential for promoting exports through e-commerce entities.

India's FDI policy allows 100 per cent FDI in the marketplace model of e-commerce under the automatic route, where companies, such as Amazon and Flipkart, act as platforms connecting buyers and sellers but do not own the inventory.

However, FDI is restricted in the inventory-based model, where the e-commerce entity directly

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