U.S. lobby group views India’s e-commerce plan as worrying, email shows

By Aditya Kalra, Abhirup Roy

NEW DELHI (Reuters) – A top lobby group that is part of the U.S. Chamber of Commerce believes India’s proposed new e-commerce rules are a cause for concern and a strict operating environment, according to a Reuters-verified email for businesses.

FILE PHOTO: A delivery driver carries an Amazon package to be delivered to a customer at a residential apartment in Ahmedabad, India on March 17, 2021.REUTERS / Amit Dave / File Photo

India this week shocked online retailers like Amazon and Walmarts Flipkart by outlining plans to limit “flash sales”, curb a private label push, and ordering them to have a grievance handling system.

Washington-based US-India Business Council (USIBC), which includes Amazon and Walmart, described the rules as worrying in an internal email, saying some provisions were in line with New Delhi’s stance on other major digital companies.

India’s draft plan “contains several relevant guidelines, including significant restrictions on the platforms’ ability to organize sales and handle complaints,” USIBC said in an email to its members.

USIBC has in the past urged India not to tighten separate rules on foreign investment here in companies like Amazon and Flipkart, an issue that has often weighed on trade relations between India and the United States.

USIBC did not immediately respond to a request for comment.

The new rules, which are available for consultation through July 6, are expected to take effect across the board in an online retail market valued at $ 200 billion by 2026.

They’ll also apply to Indian companies like BigBasket by Tata and JioMart by Reliance Industries, but the proposal comes after years of Indian retailers complaining that market leaders Amazon and Flipkart were using complex business structures to circumvent India’s foreign investment law and target small businesses violate.

The companies deny any wrongdoing.

India’s new proposed rules have raised concerns that they will force Amazon and Flipkart to review their business structures, industry sources and lawyers told Reuters.

The USIBC email indicated that India’s proposals “discourage (e-commerce) platforms from owning vendors”.

In particular, Amazon holds an indirect stake in two of its top sellers, and a Reuters investigation cited Amazon documents here in February showing that a small number of its sellers received preferential treatment.

India’s rules will also force e-commerce companies to disclose the country of origin of a product and propose alternatives to ensure a “fair opportunity for domestic goods”.

Some of the new regulations are in line with India’s similar federal guidelines “for social and digital media companies …

Reporting from Aditya Kalra in New Delhi; Edited by Kenneth Maxwell