In January last year, the Department for Promotion of Industry and Internal Trade (DPIIT), the nodal government agency for framing policy around foreign direct investment in the country, convened a meeting with executives from major quick commerce companies. The discussion reportedly focused on the operational structure of these platforms, particularly the role of “dark stores”—small warehouses located close to urban consumers that enable ultra-fast deliveries. The regulatory’ interest signals a potential shift toward stricter enforcement of India’s e-commerce FDI regime, a framework that has long attempted to maintain a distinction between technology platforms that merely facilitate purchase and sale commonly known as ‘marketplace-based e-commerce’ as opposed to the companies that own and sell inventory directly ‘inventory-based e-commerce’. Under India’s FDI policy, 100% foreign investment is permitted in marketplace-based e-commerce models. These platforms function as digital intermediaries that connect buyers and sellers but do not own the products being sold. Inventory-based e-commerce models, however—where companies own and sell goods directly to consumers—are barred from receiving any foreign direct investment.
Regulatory uncertainty clouds the future of dark stores in India
