India Wants to Ban Amazon Prime Day
The Indian government’s proposed rules would drastically change e-commerce by restricting flash sales, private label goods, and other anticompetitive practices
I previously wrote in length about how Amazon and Flipkart are skirting India’s e-commerce laws by engaging in predatory pricing and hurting offline retailers and small sellers on their platform in the process.
My main argument in that piece was that Amazon and Flipkart repeatedly find their way around India’s Foreign Direct Investment (FDI) policy, which outlines that e-commerce companies with FDI can only operate as marketplaces for third-party sellers and cannot operate an inventory-based model where they sell directly to customers.
I ended my piece with a rather unhopeful note, saying that the Indian government’s lackadaisical attitude towards enforcing its own e-commerce policy allows these companies to engange in anti-competitive practices and the only hope is in JioMart, which has the ability to change things and help smaller sellers.
I was wrong.
The government’s proposed amendments to e-commerce rules
The Indian government on June 21 proposed amendments that give the existing Consumer Protection (E-Commerce) Rules, 2020 more teeth. The proposed changes include new rules to address abuse of FDI regulations, the establishment of a grievance redressal mechanism, new display and labelling criteria for imported goods, the prohibition of flash sales, restrictions on promotions, fall-back liability, among other things.
The government said in a press release that the changes are in response to “several representations from aggrieved consumers, traders and associations complaining against widespread cheating and unfair trade practices being observed in the e-commerce ecosystem.”
The government is currently reviewing the feedback it has received from various stakeholders regarding these proposed amendments.
Here are some of the most important changes and how they will affect the e-commerce landscape.