The Union Government allowed 100
per cent foreign direct investment (FDI) in e-commerce marketplaces under the
'marketplace model' through the automatic route seeking to legitimize existing
business of e-commerce companies in India. E-commerce companies will be forced
to restructure their model of operation in order to raise funds at their
current valuations. Also, since FDI is not permitted in inventory-based model,
rustling up higher rounds of funding would prove to be a difficult task.
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