India plans stricter e-commerce rules in complaints against Amazon, Flipkart

File Photo: On March 17, 2021, a worker sorts parcels delivered in a van outside the Amazon facility in Ahmedabad, India. 2021.Reuters / Amit Dave

June 21, 2021

By Aditya Kalra

New Delhi (Reuters) -India proposes to ban flash sales on e-commerce websites and platform affiliates on Monday with proposed tightening of rules that could hit Amazon and Wal-Mart flipkart Should not be listed as a seller of.

Consumer Affairs Ministry rules released in a government statement are in complaints from retailers in physical stores that foreign e-commerce players are using complex business structures to circumvent Indian law. ..

Amazon and Flipkart state that they comply with all Indian laws. Amazon said Monday that it was considering draft rules and had no immediate comment, but Wal-Mart’s Flipkart did not respond to Reuters’ request for comment.

Under stricter proposals, e-commerce companies should not make flash sales in India. Although very popular during the holiday season, it faces anger among offline sellers who say they can’t compete with the big discounts online.

E-commerce companies also need to ensure that “related parties and companies” are not listed as sellers on shopping websites, and that related entities do not sell products to online sellers running on the same platform. there is.

According to industry sources and lawyers, this change could impact the business structure used by Flipkart and Amazon in the fast-growing Indian e-commerce market.

A February Reuters survey showed that Amazon had given preferential treatment to a small group of sellers over the years. Amazon has an indirect stake in two of its website’s top sellers, but says it doesn’t offer any incentives.

Foreign e-commerce players should not sell directly to consumers and may only operate a market for sellers.

Amazon and Flipkart are also regulated under the Foreign Investment Regulations on India’s e-commerce, and it was not clear whether the proposed Consumer Ministry regulations would replace them.

According to a statement from the Government of India, this proposal is applicable to both Indian and foreign players and will be open for public consultation until July 6.

The rule also requires companies to offer alternative products before customers make purchases “to ensure a fair opportunity for domestic products.”

“This proposal basically changes the structure of e-commerce. It goes far beyond consumer rules. It’s basically like the policy of the e-commerce industry,” said one e-commerce executive. Says.

Amazon and Flipkart are separately trapped in a court battle with federal antitrust watchmen to stall their investigation of business practices.

(Report by Aditya Kalra, New Delhi, edited by Alexander Smith)

India plans stricter e-commerce rules in complaints against Amazon, Flipkart

Source link India plans stricter e-commerce rules in complaints against Amazon, Flipkart

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