Indian gov’t’s proposed ecommerce rules may impact Amazon, Flipkart

The Indian government has proposed amendments to its ecommerce rules that may have a huge impact on Amazon, Walmart-backed Flipkart, and others.

The proposed rules come after several brick-and-mortar retailers and parties have accused the ecommerce firms of indulging in unfair trade practices.

India plans stricter e-commerce rules / Photo credit: Tech in Asia

“It was observed that there was an evident lack of regulatory oversight in ecommerce, which required some urgent action,” India’s Ministry of Consumer Affairs, Food & Public Distribution said in a statement. “Moreover, the rapid growth of ecommerce platforms has also brought into the purview the unfair trade practices of the marketplace ecommerce entities [such as] engaging in manipulating search results to promote certain sellers, preferential treatment of some sellers, indirectly operating the sellers on their platform, impinging the free choice of consumers, selling goods close to expiration, etc.”

Key rules proposed

Among its proposed amendments, the Indian government recommends appointing a resident grievance officer for addressing consumer grievances.

It also suggests barring ecommerce firms from holding “back-to-back” or “flash” sales where they have sellers on their platforms that don’t have any inventory of their own and instead would place orders with another seller that is controlled by the same ecommerce platform.

Ecommerce companies may also be barred from listing sellers that are related to and associated with them on their platforms and are selling directly to consumers.

The proposed rules also seek that ecommerce firms list suggestions for alternative products to help “ensure fair opportunity for domestic good.”

Amazon and Flipkart are yet to respond to Tech in Asia’s queries regarding this development.

Amazon, Flipkart face increasing heat in India

Amazon and Flipkart continue to dominate India’s ecommerce space, which saw an exponential rise in traction in the last few months owing to the Covid-19 stay-at-home measures.

However, the two ecommerce giants have faced antitrust probes, with antitrust watchdog Competition Commission of India (CCI) looking to expedite a renewed probe into allegations of anti-competitive practices by the two firms, Reuters reported last week.

Earlier this month, the traders’ body Confederation of All India Traders (CAIT) ran an “ecommerce purification week” campaign against the ecommerce companies, alleging “unethical business practices” on their end, Money Control reported.