1. E-Commerce Regulations
1.1 What are the key e-commerce legal requirements that apply to B2B e-commerce in your jurisdiction (and which do not apply to non-e-commerce business)? Please include any requirements to register, as well as a summary of legal obligations specific to B2B e-commerce.
In India, there is a great degree of overlap in legislations governing e-commerce and non-e-commerce businesses, such as the requirements for setting up a business, employment laws, and legal metrology legislations.
The following are the legislations that are specifically applicable to B2B e-commence:
Foreign Direct Investment (FDI) Policy: The applicable foreign exchange control regulations that govern foreign investments and setting-up of a business in India by foreign entities and individuals are the prevailing Foreign Direct Investment Policy and the Foreign Exchange Management Act, 1999 with the accompanying Rules. The FDI Policy prescribes: the maximum ownership that a foreign individual or a foreign entity can have in an Indian entity engaged in certain business activity; the nature of business entity which can be established; the quantum of investment to be made for setting up or acquiring a business; and various other conditions that an Indian entity with foreign investment should comply with.
100% foreign direct investment is permitted in companies engaged in Cash and Carry Wholesale Trading and B2B e-commerce business. Such investment can be made without prior approval of Government of India.
Cash and Carry Wholesale Trading, including sale through B2B e-commerce, would mean sale of goods or merchandise to retailers, industrial, commercial, institutional or other professional business users as opposed to end-consumer or retail customer for personal consumption.
The following conditions apply on companies with foreign direct investment engaged in B2B e-commerce:
1. Customers to whom goods can be sold: Sales should be made to retailers, industrial, commercial, institutional or other professional business users, namely:
