Indian trader group says minister pledges strict foreign investment rules for e-commerce


FILE PHOTO: People move past a hoarding of Amazon India outside a metro rail station in New Delhi, India, October 23, 2019. REUTERS/Anushree Fadnavis/File Photo

NEW DELHI (Reuters) - An India trader group representing millions of brick-and-mortar retailers on Friday said it has received government assurances that stringent changes will be made to foreign investment rules for e-commerce, a move that could hit Amazon.com Inc.

Reuters exclusively reported this week India was considering revising the policy after complaints from traders who accuse Amazon and Walmart Inc's Flipkart of creating complex structures to bypass investment rules. The U.S. companies deny any wrongdoing.

The Confederation of All India Traders (CAIT) said in a statement that its delegation held a meeting late on Thursday with Indian Commerce Minister Piyush Goyal, who told them a "strenuous exercise" was underway to issue new foreign investment rules.

"Mr. Goyal told us the government will address concerns about alleged violations of current rules. The new rules will be issued shortly," Praveen Khandelwal, secretary general of CAIT told Reuters.

CAIT says it represents 80 million retail stores in India.

India's ministry of commerce did not immediately respond to a request for comment on CAIT's statement.

India's e-commerce retail market is seen growing to $200 billion a year by 2026, from $30 billion in 2019, the country's investment promotion agency Invest India estimates.

Unhappy domestic traders say foreign e-commerce businesses indulge in unfair business practices that use steep discounts to target rapid growth, allegations the companies deny.

Amazon and Flipkart were last hit in Dec. 2018 by investment rule changes that barred foreign e-commerce players from offering products from sellers in which they have an equity stake.

Now the government is considering tweaks to prevent those arrangements even if the e-commerce firm holds an indirect stake in a seller through its parent, Reuters reported.

The government is also considering prohibiting online sales by a seller who purchases goods from the e-commerce entity or its group firm, and then sells them on the entity's websites.

Amazon and Flipkart did not respond to a request for comment. On Tuesday, reacting to the Reuters story, Amazon had said "any major alterations" to the investment policy will adversely impact small- and medium-sized businesses.

(Reporting by Aditya Kalra and Krishna Das in New Delhi; editing by Emelia Sithole-Matarise)

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 18
Cxense type: free
User access status: 3

   

Did you find this article insightful?

Yes
No

Next In Tech News

Facebook removes Thai military-linked information influencing accounts
Explainer: How brands will target ads to you after the death of browser cookies
Parler drops case against Amazon for pushing it offline over Capitol violence
Google won't use other web tracking tools after phasing out cookies
European telcos cash in on tower assets as high-cost 5G investment looms
Emerging Europe.com bolsters defences as Amazon enters Poland
Labour rights issue at forefront of Spain’s gig economy with potential regulation
Musk floats ‘Starbase’ name change for Texas launch town
Number of Germany's electric vehicle charge points rise 10% since December
Air-taxi startup Volocopter boosts funds in race to get flying

Stories You'll Enjoy


Vouchers