Amazon.com Inc.
and the Indian Group warned government officials on Saturday that plans for harder rules for online retailers would have a major impact on their business model, four sources were familiar with the discussion to Reuters.
At a meeting held by the Ministry of Consumer Affairs and the Sleeves of Government Investment Promotion, Investing India, many executives expressed concern and confusion over the proposed rules and requested that the July 6 deadline for sending extended comments, the source said.
New E-commerce Regulations The strong government announced on June 21 aims to strengthen protection for consumers, causing concern among the country’s online retailers, especially the Amazon market leader and Walmart Inc’s Flipkart.
New rules that limit Flash sales, restrictions on misleading ads and mandate complaints systems, among other proposals, can force people like Amazon and Flipkart to review their business structure, and can increase costs for domestic rivals including Jiomart Reliance Industries, Bigbasket and Snapdeal.
Amazon believes that Covid-19 has reached a small business and the proposed rules will have a major impact on the seller, on the grounds that some clauses have been covered by the existing law, two sources say.
Sources request not to be mentioned as personal discussions.
The proposed policy states e-commerce companies must ensure that no relevant companies are registered as sellers on their website.
It could have an impact on Amazon in particular because it holds indirect shares at least in two sellers, Cloudtail and Appario.
In the proposed clause, representatives from Tata Sons, the parent company from the Group of $ 100 billion in India, argues that it is troubled, citing examples to say it will stop Starbucks – which has a joint venture in India – from the offer of its products on the Marketplace website System.
Tata executives say the rules will have a wide consequence for conglomerates, and can limit the sales of their personal brands, according to two sources.
Tata refuses to comment.
Sources say that a consumer ministry official argues that the rules are intended to protect consumers and not properly with other countries.
The ministry does not respond to a comment request.
Reliance’s executive agreed that the proposed rules would increase consumer confidence, but added that some clauses needed clarification.
Reliance does not respond to comment requests.
The rules were announced last month amid a growing complaint from brick retailers and Indian mortars which amazon and flipkart bypass foreign investment laws using complex business strcutures.
The company denies errors.
Reuters investigation in February cites the Amazon document which shows it provides preferential treatment for a small number of sellers and exceeds the rules of foreign investment.
Amazon said it did not provide beneficial care to any seller.
The government will immediately issue certain clarification on the rules of foreign investment, the Indian Minister of Trade Piyush Goyal told reporters on Friday.