India’s eCommerce Rules Could Hike Business Costs

Brahm Buck

Amazon and Tata Group privately told government officials in India on July 3 that planned stiffer regulations covering online retail companies could substantially harm their business models, Reuters reported, citing multiple unnamed sources. At the meeting, Reuters reported, “many executives expressed concerns and confusion over the proposed rules and asked […]

Amazon and Tata Group privately told government officials in India on July 3 that planned stiffer regulations covering online retail companies could substantially harm their business models, Reuters reported, citing multiple unnamed sources.

At the meeting, Reuters reported, “many executives expressed concerns and confusion over the proposed rules and asked that the July 6 deadline for submitting comments be extended.”

Amazon, Walmart and Flipkart already had expressed concern about new regulations that were billed when introduced on June 21 as pro-consumer, Reuters reported.

One of the objections expressed, according to Reuters, concerns a provision in the rules that would prevent e-retailers from listing companies with which they are related as sellers on the parent companies’ platforms. Reuters reported that Amazon holds stakes in at least two Amazon sellers: Cloudtail and Appario.

A Tata representative, Amazon reported, said at the meeting that an example of a problematic scenario under the new rules would be that Tata couldn’t sell Starbucks products on its website because the two companies operate a joint venture.

Reuters reported Indian commerce minister Piyush Goyal told reporters on July 2 that the government soon will clarify the regulations.

In March, according to reports at the time, Amazon representatives asked government officials in India to delay issuing any new regulations affecting eCommerce.

PYMNTS reported at the time that draft of regulations Indian officials were exploring stated, according to Reuters, “eCommerce operators must ensure equal treatment of all sellers/vendors registered on their platforms and not adopt algorithms that result in prioritizing select vendors/sellers.”

The draft regulations also stated, Reuters reported, that eCommerce companies must “bring out clear and transparent policies” insofar as online discounts are concerned.

 

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