India plans tighter e-commerce guidelines amid complaints over Amazon, Flipkart

NEW DELHI, June 21 (Reuters) – India proposed banning flash gross sales on e-commerce web sites and stated on Monday their affiliate entities shouldn’t be listed as sellers on their platforms, in a proposed tightening of guidelines that would hit Amazon and Walmart’s Flipkart.

The Ministry of Shopper Affairs’ guidelines, which have been launched in a authorities assertion, come amid complaints by brick-and-mortar retailers that overseas e-commerce gamers bypass Indian legal guidelines through the use of advanced enterprise constructions.

Amazon (AMZN.O) and Flipkart say they adjust to all Indian legal guidelines. Amazon stated on Monday it was reviewing the draft guidelines and had no fast remark, whereas Walmart’s Flipkart (WMT.N) didn’t reply to a Reuters request for remark.

Underneath the stricter proposals, e-commerce corporations shouldn’t maintain flash gross sales in India. These are massively widespread throughout festive season, however have confronted anger amongst offline sellers who say they can’t compete with the deep reductions on-line.

E-commerce companies should additionally be certain that none of their “associated events and related enterprises” are listed as sellers on their purchasing web sites, and no associated entity ought to promote items to a web-based vendor working on the identical platform.

The adjustments may influence enterprise constructions utilized by Flipkart and Amazon within the quick rising Indian e-commerce market, trade sources and attorneys stated.

A Reuters investigation in February confirmed Amazon had given preferential remedy to a small group of sellers for years. Amazon holds an oblique stake in two of the highest sellers on its web site, however says it doesn’t give any preferential remedy.

Overseas e-commerce gamers should not make direct gross sales to customers, and may solely function a market for sellers.

Amazon and Flipkart are additionally regulated below India’s overseas funding guidelines for e-commerce, and it was not clear if the proposed client ministry guidelines will supersede them or not.

The proposal, which is relevant to each Indian and overseas gamers, is open for public session till July 6, the Indian authorities assertion stated.

The principles additionally name on corporations to make recommendations of different merchandise earlier than prospects make purchases “to make sure a good alternative for home items.”

“This proposal mainly adjustments the way in which e-commerce is structured. That is manner past client guidelines – that is mainly like an e-commerce trade coverage,” one e-commerce govt stated, including: “Will probably be extraordinarily disruptive.”

Amazon and Flipkart are individually locked in a courtroom battle with federal antitrust watchdog to stall an investigation into their enterprise practices.

Reporting by Aditya Kalra in New Delhi;
Enhancing by Alexander Smith

Our Requirements: The Thomson Reuters Belief Rules.