UPSC CSE Prelims
Question 22
With reference to foreign-owned e-commerce firms operating in India, which of the following statements is/are correct ?
- They can sell their own goods in addition to offering their platforms as market-places.
- The degree to which they can own big sellers on their platforms is limited.
Select the correct answer using the code given below :
View correct answer and explanation
Correct answer: D
Correct Option: D (Neither 1 nor 2)
Explanation: Under India’s foreign-investment rules, foreign-funded marketplace platforms cannot themselves retail their inventory. The official-key reading also rejects a mere “limited degree” of ownership in sellers listed on the same platform.
Statement / Pair / Item-wise Analysis:
1. False / does not qualify - FDI is allowed for a marketplace facilitator, not for that entity selling inventory it owns.
2. False / does not qualify - A seller in which the marketplace entity or its group companies have equity participation cannot list on that marketplace; it is not simply subject to a permissible ownership-percentage cap.
Option-wise Analysis:
A. Incorrect-includes 1 even though FDI is allowed for a marketplace facilitator, not for that entity selling inventory it owns.
B. Incorrect-includes 2 even though A seller in which the marketplace entity or its group companies have equity participation cannot list on that marketplace; it is not simply subject to a permissible ownership-percentage cap.
C. Incorrect-includes 1 even though FDI is allowed for a marketplace facilitator, not for that entity selling inventory it owns.; includes 2 even though A seller in which the marketplace entity or its group companies have equity participation cannot list on that marketplace; it is not simply subject to a permissible ownership-percentage cap.
D. Correct-selects exactly the correct statements/items identified above.
Review note: Interpretation dispute: some educational sources mark statement 2 true because rules restrict marketplace ties to sellers. The supplied key D is retained; the prohibition on listing equity-linked sellers, rather than a percentage cap on ownership, underlies the D interpretation. See 2022 UPSC key discussions.