CURRENT AFFAIRS | 24 JULY 2026
The Department for Promotion of Industry and Internal Trade (DPIIT) has permitted foreign direct investment (FDI) in the inventory-based model of e-commerce — but exclusively for the export of goods produced in India. The move aims to boost Indian e-commerce exports, which stand at just about $5 billion against China’s $300 billion.
Constitutional & Legal Framework
- FDI routes: India permits FDI via the Automatic Route (no prior approval) and the Government Route (prior approval). E-commerce marketplace model allows 100% FDI automatically.
- FEMA, 1999: Foreign exchange and cross-border investment are governed by the Foreign Exchange Management Act, 1999, administered by the RBI.
- Inventory vs marketplace model: In the inventory model the e-commerce entity owns the goods; in the marketplace model it only connects buyers and sellers.
The CLAT Angle
CLAT economy and legal-reasoning sets test FDI routes (Automatic vs Government), the difference between the inventory and marketplace e-commerce models, and the role of DPIIT and FEMA. Note the earlier rule: 100% FDI was allowed in the marketplace model but NOT the inventory model — now relaxed only for exports. Link foreign-exchange regulation to FEMA and the RBI.
Key Facts at a Glance
| Decision | FDI permitted in inventory-based e-commerce model — only for exports |
| Nodal body | DPIIT (Ministry of Commerce & Industry) |
| Current exports | ~$5 billion vs China’s ~$300 billion |
| Governing law | FEMA, 1999; FDI Policy |
| Beneficiaries | MSMEs exporting handicrafts, art, books, ready-made garments, jewellery |
Memory Hook: “FDI-AGE”
FDI comes via Automatic or Government route; now inventory model opened for Exports.
Test Yourself: 10-Question Quiz
Attempt all 10 questions below and check your CLAT current-affairs readiness.
Practice Quiz — 10 CLAT-Style Questions
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