Because it is exclusive to Amazon, Tata says Indian governments will affect businesses by e-commerce rules -Sources Reuters

By the hand of Aditya Kalra

NEW DELHI (Reuters) – Amazon.com Inc (NASDAQ 🙂 and India’s Tata Group warned government officials on Saturday that plans to tighten regulations for online retailers will have a major impact on their business models, four sources familiar with the dispute told Reuters. .

Sources said that at the meeting organized by Invest India, the Ministry of Consumer Affairs and the government to promote investment in weapons, many executives expressed concern and confusion over the proposed rules and sources asked for an extension of 6 July to send comments.

The government’s tough e-commerce rules announced on June 21 have raised concerns among consumers across the country, including Amazon and Walmart market leaders (NYSE 🙂 Inc.’s Flipkart, aimed at strengthening consumer protection.

New rules restricting flash sales, banning misleading ads and promising a complaint system, among other proposals, could force companies like Amazon and Flipkart to overhaul their business structures and raise costs for home rivals such as Reliance Industries JioMart, BigBasket and Snapdeal.

Amazon argued that COVID-19 had already hit small businesses and that the proposed rules would have a major impact on its sellers, two sources said, adding that some of the clauses covered laws already in force.

Sources asked for the discussion as the discussions were private.

The proposed policy states that e-commerce companies need to ensure that not a single related company appears as a seller on websites. This may have an impact on Amazon as it has a particularly indirect stake in at least two of its vendors, Cloudtail and Appario.

Regarding the proposed clause, a representative of Tata Sons, an Indian $ 100,000 billion Tata Group company, argued that it was a problem, citing an example that would stop Starbucks (NASDAQ 🙂 – which has a joint venture with Tata in India – from offering its products on the Tata marketplace website.

The Tata executive said the rules will have major ramifications for the conglomerate, which could limit sales of its private labels, according to two sources.

Tata does not want to comment.

Sources said an official at the consumer ministry argued that the rules protect consumers and were not as stringent as those in other countries. The ministry has not responded to the request for comment.

A Reliance executive acknowledged that the proposed rules would increase consumer confidence, but added that some clauses needed to be clarified.

The bond did not respond to a request for comment.

The rules were unveiled last month amid growing complaints from brick-and-mortar stores in India that Amazon and Flipkart are avoiding foreign investment law by using complex businesses. Companies deny wrongdoing.

A Reuters investigation https://www.reuters.com/investigates/special-report/amazon-india-operation cited documents from Amazon in February that showed that it preferred its few sellers and avoided foreign investment rules. Amazon has said it does not treat any sellers well.

The government will soon provide some information on foreign investment rules, Indian Commerce Minister Piyush Goyal told reporters on Friday.