1. They can sell their own goods in addition to offering their platforms as market-places.
2. The degree to which they can own big sellers on their platforms is limited.
Select the correct answer using the code given below:
Explanation
Statement 1 is incorrect: Under India’s Foreign Direct Investment (FDI) policy, foreign-owned e-commerce firms operating as marketplace models (e.g., Amazon, Flipkart) can-not sell their own goods. They are only allowed to provide a platform for third-party sellers.
Statement 2 is correct: The FDI policy limits the degree to which foreign-owned e-commerce firms can own or control sellers on their platforms. For example, a single seller cannot account for more than 25% of the total sales on the platform(as per FDI policy).
If foreign e-commerce players (like Amazon, Walmart-Flipkart) were allowed to sell their own goods directly, they would become inventory-based, not mar-ketplaces. This would hurt Indian MSMEs and create conflict of interest. Also, if they can’t even hold large stakes in sellers (S2), then how can they sell their own goods directly(S1)? Both cannot be true at once. If S2 is true, S1 must be false.