The Ministry of Commerce and Industry is coming up with a new e-commerce policy to rein in businesses like Amazon, which openly flout government norms. According to reports, the draft of the e-commerce policy states, “Actions and things that cannot be done by the platform entities can also not be done by any of its associates and related parties.” The statement seems to be directed at Amazon, though the policy specifically doesn’t name the e-commerce giant.
Indian FDI rules do not allow the e-commerce companies like Amazon and Walmart owned Flipkart to sell their products, or the products of a company in which they have stake/interest, on their website. However, in order to bring the price of the product down, companies like Amazon and Flipkart direct most of the consumer traffic to companies owned by them. And, through this, they harm the interest of the small businesses.
The Jeff Bezos led company is using its deep pockets to monopolise the Indian e-commerce industry. Despite being the leader in the e-commerce market, Amazon has to face losses of billions of dollars every year due to heavy discounts offered to customers. But make no mistake, this strategy helps the e-commerce giant attracts a pool of customers.
Trade unions like the Confederation of All India Traders (CAIT) have complained to Amazon as well as the concerned ministry many times but those went unanswered. The traders in India have suffered heavy losses due to the entry of Amazon and Flipkart and have been lobbying with the government to come up with a crystal clear policy against foreign investment in retail for a long time.
Now the government has come up with a policy to address the issue and it will be in the public domain very soon. “If this new policy goes through, there will be no business certainty (in e-commerce),” said a top executive at a leading e-commerce marketplace who didn’t want to be identified. If the government can, at any time, change its definition of related parties, forcing us to restructure our businesses, that does not create a very conducive environment,” reads the draft of the new e-commerce policy.
In the last few years, Amazon has emerged as a market leader by flouting Indian e-commerce norms. Now the government is trying to rein in the global giant with a new e-commerce policy. Under the Modi government’s Aatmanirbhar campaign, Indian businesses are being prioritised over foreign ones. India’s e-commerce market is dominated by two American behemoths – Walmart owned Flipkart and Amazon. And, both flout the Indian e-commerce norms in order to put Indian traders at the losing end.
CAIT, the body that represents more than six crore traders of the country expressed its pleasure over the new e-commerce norms. “They (Amazon and Flipkart) are openly flouting norms and have treated India as a banana republic,” said CAIT secretary general Praveen Khandelwal. “I’m pleased to see that things are moving in the right direction now, and final discussions are going to be held with stake holders and others. It shows the government’s intention that it will come out with a new Press Note and a robust e-commerce policy,” he added.
The new e-commerce policy would give the Indian traders their due place in the Indian market. In the last few years, traders have lost a significant market share to the retailers floated by companies like Amazon and Flipkart. The new e-commerce policy would create a levelled playing field for retailers and e-commerce players.