Indian government to announce a new draft e-commerce policy in a few weeks

The new policy could entail provisions for a regulator in the sector dominated by Amazon, Flipkart.

India will announce a new draft policy for e-commerce in a few weeks, a day after the country tweaked foreign investment rules for the burgeoning sector.

The new e-commerce policy could entail provisions for a regulator in the sector dominated by Amazon and homegrown Flipkart, which was bought over by retail giant Walmart for $16 billion earlier this year.

Representational image: Reuters

Representational image: Reuters

India on 26 December introduced changes to foreign direct investment rules, banning e-commerce players from selling products from entities in which they have an equity interest, a move the source said was aimed at preventing anti-competitive practices. The source declined to be named as the matter was not public.

The government of India also said that these companies will be prevented from entering into exclusive agreements with sellers — “An entity having equity participation by e-commerce marketplace entity or its group companies, or having control on its inventory by e-commerce marketplace entity or its group companies, will not be permitted to sell its products on the platform run by such marketplace entity,” the commerce ministry said. The new rules will be applicable from 1 February.

The new regulations follow complaints from Indian retailers and traders, who say the giant e-commerce companies are using their control over inventory from their affiliates, and through exclusive sales agreements, to create an unfair marketplace that allows them to sell some products at very low prices.

The Confederation of All India Traders in a statement said that if the order is implemented in full then malpractices, predatory pricing policies and deep discounting by e-commerce players will no longer occur.

(Also read: New e-commerce policy aids smaller players by breaking unholy nexus between marketplace and affiliate sellers)

With inputs from Reuters

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