India’s first e-commerce policy to be rolled out soon. Should Amazon, Flipkart worry?
The revised draft of the policy may entail stricter regulations for Amazon and Flipkart especially after trader bodies have been accusing them of predatory pricing and getting preferential treatment
The government is likely to roll out the country’s first e-commerce policy soon which will include the provisions issued by the Department of Promotion of Industry and Internal Trade (DPIIT) as well as mandate sellers to notify the origin of products, top sources privy to the development told The New Indian Express.
The revised draft of the policy may even entail stricter regulations for e-commerce giants like Amazon and Flipkart especially after trader bodies have been accusing them of predatory pricing and getting preferential treatment.
“The DPIIT will put out a draft soon to seek suggestions from stakeholders and get the necessary approvals from the commerce ministry as well as the PMO. Most likely, the policy will be rolled out before August 15,” sources revealed. Industry watchers said that the government is likely to introduce the revised FDI regulations seeking government approval for any investment from a neighbouring country as a policy measure for the e-commerce sector.
Besides, the DPIIT has also been meeting representatives of e-commerce companies over the past week seeking their suggestions on notifying the “origin of products” on the marketplaces so that buyers make an informed choice in purchasing the commodities. This was after the Delhi High Court issued notices to e-commerce firms mandating the disclosure of the country of origin of products sold on their platforms.
The inclusion of provisions under PressNote 3 issued by DPIIT may also worry e-commerce companies as Chinese investors have been funding firms like Flipkart, Snapdeal albeit for a minority stake.
“Although China is not dominating the e-commerce market in India, yet the stricter FDI norms may worry Amazon and the Walmart-backed Flipkart as the government is trying to help local entrepreneurs develop their own apps and marketplaces for a self sufficient India. The e-commerce companies have also been battling accusations of creating an unfair market from trade organizations. Besides, the country’s top company, Reliance’s e-commerce venture may further prove to be a pain point for Amazon and Flipkart,” a market analyst said.
The Confederation of All India Traders (CAIT), an organization of 70 million traders in India, had already written to the Industry and Commerce minister Piyush Goyal seeking to penalize e-commerce companies if they are found to be involved in predatory pricing, deep discounting and other unfair market practices.