- Monday, February 24, 2025
By: Shubham Ghosh
E-COMMERCE Amazon and India’s Tata Group have warned the Indian government that plans to bring in tougher rules for online retailers would adversely impact their business models, Reuters reported citing four sources.
At a meeting organised by the consumer affairs ministry of the government and Invest India, its investment-promotion arm, on Saturday (3), many executives were worried and confused over the proposed rules and asked whether the July 6 deadline for submitting comments be extended, the sources said.
The Narendra Modi government’s tough e-commerce rules that were announced on June 21 aimed at giving the consumers a strong protection but the country’s online retailers were concerned over them, especially giants like Amazon and Walmart which owns Flipkart.
ALSO READ: Centre clarifications on e-commerce sector very shortly: Piyush Goyal
India traders body asks government not to dilute draft e-commerce rules
According to the report, new rules restricting flash sales, barring misleading advertisements and making a complaints system compulsory, among other proposals, could force the likes of Amazon and Flipkart to reassess their business structures and may see an increase in cost for domestic rivals like JioMart, BigBasket and Snapdeal.
Amazon has said that the Covid-19 pandemic has already hit the small traders and the proposed rules will adversely affect its sellers, arguing that some clauses were already covered by the prevailing law, two of the sources that refused to be named told Reuters.
Under the proposed policy, the e-commerce firms must ensure that none of their related enterprises are listed as sellers on the website. It could hurt Amazon in particular since it holds an indirect stake in at least two of its sellers – Cloudtail and Appario, the report added.
One representative from Tata Sons, the holding company of India’s Tata Group, said it could create a problem. Giving an example, it said the rules would prevent Starbucks, which has a joint venture with Tata in India, from offering its products using Tata’s marketplace website. According to the executive, the rules could limit sales of private brands, as per the sources, and that would hit the conglomerate.
Reliance executive says some clauses need clarification
An executive from Reliance said the proposed rules would boost consumer confidence, something the consumer ministry has argued, but added that some of the clauses required clarification.
The rules came up amid growing complaints from India’s small retailers that e-commerce sites like Amazon and Flipkart were bypassing foreign investment law using complex business structures. The firms though denied the charges.
Indian commerce minister Piyush Goyal told reporters last week (2) that the government will soon issue certain clarifications on the foreign investment rules.
