US lobby group requests India not to tighten foreign e-comm rules


By MYBRANDBOOK


US lobby group requests India not to tighten foreign e-comm rules

According to sources, a U.S. lobby group which represents firms including Amazon.com and Walmart has urged India not to tighten foreign investment rules for e-commerce companies again

 

India is considering revising the rules after traders in the country accused Amazon's Indian division and Walmart's Flipkart of creating complex structures to bypass investment regulations.

 

India only allows foreign e-commerce players to operate as a marketplace to connect buyers and sellers but local traders say the U.S. giants promote select sellers and offer deep discounts, which hurts business for smaller local retailers.

 

The government is now considering tightening those rules again to include sellers in which a foreign e-commerce firm holds an indirect stake through its parent. Such a change could hurt Amazon as it holds indirect stakes in two of its biggest online sellers in India, Cloudtail and Appario.

 

"Any further changes in FDI rules would limit e-commerce firms from leveraging their scale," USIBC said in the letter.

 

USIBC also asked India's Department for Promotion of Industry and Internal Trade (DPIIT) to engage in substantive consultation with companies on e-commerce regulation.

 

The government is also considering prohibiting online sales by a seller who, for example, purchases goods from an e-commerce entity's wholesale unit, or any of its group firms, and then sells them on the entity's websites.

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