BHUBANESWAR: The recent tightening of norms for the e-commerce sector is set to have long-term implications, said Flipkart on Friday.
“The policy changes will have long-term implications for the evolution of the promising sector and the whole ecosystem. It is important that a broad market-driven framework be developed through a consultative process in order to drive the industry forward,” the company said in a statement.
The renewed policy on Foreign Direct Investment (FDI) in e-commerce envisages a level playing field for e-tailers and offline traders, barring companies such as US-based Amazon and Walmart-owned Flipkart from selling products from companies in which they have an equity interest or with which they form exclusive agreements.
The new norms would also end discounts and cashback offers that online platforms with foreign investment were offering. Experts say that the curbs follow intense lobbying by the domestic traders who serve them, particularly after Walmart this year spent USD 16 billion to acquire Flipkart. With about a month left to comply, the two e-commerce giants would be hit the hardest. Even the US-India Strategic Partnership Forum has dubbed the new e-commerce rules as “regressive”.
Grim outlook
According to the US-India Strategic Partnership Forum, the new rules would harm consumers, create unpredictability and have a negative impact on the growth of online retail in India.