Guidelines for Foreign Companies to sell their products to consumers in India.
Retail in India is allowed for the following types of companies:
- 100 Percent Indian Owned and Indian Invested entities with no foreign investment or foreign funds invested via any local entity including PE funds with foreign money
- Single brands with foreign ownership or equity in the Indian entity provided such brands meet the criteria set by the Govt of India
- Entities and businesses owned by Overseas Citizen of India (OCI) cardholder provided the funds invested are from sources in India.
Retail sales covers any type of retail sales transaction involving goods and services, whether in a physical retail format or online retail format
What is not allowed?
- Foreign equity of any amount or any percentage in any entity in India that is engaged in multi-brand retail, whether physical retail or online retail
- Foreign equity of any amount or any percentage in any entity in India that is engaged in Single Brand Retail if the entity and business do not meet the requirements set up by the Govt of India
By interpretation, any online retail enabler too cannot have any investors or venture capital or PE funds who have funds sourced from and invested on behalf of foreign entities or individuals.
A common mistake made by overseas entities is to assume that by simply having an India based entity, they can engage in online retail. While platforms like Amazon and others only allow India based entities to list and sell, it does not mean that any foreign entity with an Indian subsidiary or JV can start selling online. While there is no check with the marketplaces for foreign ownership of Indian companies, it is incumbent on the Indian entity to be compliant with FDI in Retail.
Selling your products in India via an Indian owned and compliant merchant of record
If you are a foreign or internationally invested company in India and are seeking a brand ecommerce enabler and merchant of record, please check the ownership of such and enabler before engaging with potential enablers. As ecommerce enablers in India also play the role of retailer (the consumer invoice is raised by the ecommerce enabler), it is important for any foreign brand to be aware of these requirements and for the ecommerce enabler to be compliant with FDI in Retail.
To know more about how ND Commerce, a 100% Indian Owned and Indian invested company can provide you with ecommerce enablement while being 100% FDI Compliant, please do contact us.
We can become your brand online retailer and sell on one or more of the following channels.
- Brand Online Store
- Online Marketplaces as a seller of your brand
To know more about how ND Commerce can be your brand online retailer and Merchant of Record (MOR) please contact us today!