The central government’s proposed move to tighten e-commerce rules, which include limiting flash sales of goods and services, in the country is being viewed as a ’cause for concern’ by a top US lobby group. According to an email accessed by news agency Reuters, the group, which is a part of the US Chamber of Commerce , believes it could lead to a stringent operating environment for companies in India.
The Washington-headquartered US-India Business Council (USIBC), of which Amazon and Walmart are members, described the rules as concerning in an internal email, saying some provisions were in line with New Delhi’s stance on other big digital companies, says the Reuters report.
India’s draft plan “includes several concerning policies, including significant limits on platforms’ ability to organise sales and handle grievances,” USIBC said in an email to its members. The email noted that India’s proposals “preclude (e-commerce) platforms from owning vendors”.
The proposed amendments to the Consumer Protection (E-Commerce) Rules of 2020, which allow ecommerce portals to conduct conventional sale events while disallowing “only specific flash sales or back-to-back sales,” has created confusion among etailers, brands and sellers. Industry bodies and e-commerce firms have time until 6 July to submit their comments and suggestions on the proposed rules. The new e-commerce rules are expected to have an impact across the board in an online retail market. Reports suggest the proposed rules, if enacted, could force Amazon and Flipkart to review their business structure in India.
If the norms come into effect, every e-commerce shall establish an adequate grievance redressal mechanism having regard to the number of grievances ordinarily received by such entity from India. Amazon and Flipkart, among others, will have to appoint a Chief Compliance Officer, a Resident Grievance Officer, and a nodal contact person in India.
The proposed rules from the Ministry of Consumer Affairs come after brick-and-mortar retailers raised complaints about foreign e-commerce players finding loopholes in the law to game the system. The e-commerce companies deny any wrongdoing. The Confederation of All India Traders (CAIT), which has long demanded stricter e-commerce norms to protect the interest of offline traders, has hailed the draft norms.