Foreign e-commerce entities are permitted to engage only in Business to Business (B2B) e-commerce activities but not in Business to Consumer (B2C) activities except in certain cases (e.g., where manufacturers sell thier products manufactured in India through e-commerce retail). As of 2020, an entity having equity participation by e-commerce marketplace entity or its group companies, or having control on its inventory by e-commerce marketplace entity or its group companies, will not be permitted to sell its products on the platform run by such marketplace entity. Inventory of a vendor will be deemed to be controlled by e-commerce marketplace entity if more than 25% of purchases of such vendor are from the marketplace entity or its group companies. Foreign investment is not permitted in inventory based model of e-commerce which means an e-commerce activity where inventory of goods and services is owned by the e-commerce entity and is sold to the consumers directly.