Companies with foreign direct investment (FDI) will not be allowed to sell their products online in India, the government of India decided on Thursday.

The decision surely shuts the door on the world's most popular online retailer Amazon and many other foreign e-commerce firms that had been expecting a strong in the emerging Indian market. Apart from hitting foreign e-commerce firms, will also hit growth prospects of local e-commerce companies very hard.

Many local e-commerce companies had been seeking huge investment from foreign firms through the FDI route.

The condition also applies to investments by foreign venture capital as well as private equity funds in such ventures.

Harish Bahl, founder & chairman of Smile Group that operates several e-commerce portals like bestylish. com, fashionandyou. com and zoomtra. com, said, "It is status quo for e-commerce. We are as good or as bad as we were a week before."

The government also notified eased conditions for retail sector and the norms for allowing foreign airlines to acquire 49 per cent stake in domestic carriers and allowing greater foreign investment in some divisions of the broadcasting sector.

By notifying the relaxed conditions, the government sent out a clear signal that it would not be cowed down by the Oppositions as well as its own estranged allies like Trinamool Congress (TMC).