Preparations To Change Rules Of Foreign Investment In E-com
Preparations to change the rules of foreign investment in e-commerce, indirect participation in sellers of its platform will also not be allowed. The preparations to change the rules for foreign investment in e-commerce under the Indian government’s consideration.
Sources attached to the case say that this may make it difficult for Amazon, a giant in the e-commerce sector. Amazon may have to change the nature of alliances with some of its larger sellers. Foreign e-commerce companies in India are allowed to operate only as marketplaces, where buyers and sellers can connect with each other.
Companies in India are not allowed to create an inventory or sell their products directly to sell on their platforms. In December 2018, the government changed the rules in this regard and banned foreign e-commerce companies from selling products on their platforms in which these e-commerce companies have a stake.
Domestic retailers have been accusing Walmart-controlled Flipkart and Amazon for a long time. They say that both these companies have adopted the way of complex structure to avoid the rules. Now the government is preparing to make some more changes in the rules.
Under this, if the e-commerce companies have indirect stake in any seller through the parent company, then their products will not be sold on the respective e-commerce platform. This change could be a big setback for Amazon, as it has an indirect stake in two of its biggest sellers in India.
Amazon says that e-commerce has created massive employment opportunities and is contributing significantly to economic growth. At this time, any major change in policy can harm small and medium businessmen. Walmart and Flipkart have not commented on it yet.
Commerce Ministry spokesman Yogesh Baweja did not provide detailed information, but indicated a change in the rules. He said, ‘Work is in progress. Of course Amazon is a big company and its concerns will be taken into consideration.
The e-commerce business in India is growing rapidly. Its business in 2019 was $ 30 billion, which is estimated to reach $ 200 billion by 2026. Domestic traders are dissatisfied with this development.
They view foreign e-commerce companies as a threat to their livelihoods and accuse these platforms of misappropriating business. He says that e-commerce platforms adopt huge discounts for fast growth. However companies continue to deny such allegations.
According to sources, the government is believing that e-marketplaces are not functioning as they should. Therefore, necessary changes will be made in the policy.
