Amazon India
The Government of India has prepared a draft to ease foreign investment rules for e-commerce companies like Amazon. According to a document, these companies may be allowed to sell goods from Indian vendors to foreign customers. Right now foreign e-commerce companies in India are not allowed to sell goods directly, they can only run a marketplace connecting buyers and vendors.
According to the report of Reuters, these rules have long been the reason for the dispute between India and the US. Amazon has put pressure on the Government of India to make these rules easier. This proposal is associated with efforts to reduce differences over the trade deal between Indo-US.
Opposition of small retailers
Groups of millions of small Indian retailers have opposed this proposal. He says that Amazon’s gardener strength is a threat to their business. The 10-page draft of the Directorate General of Foreign Trade states that less than 10% of small Indian businesses participate in online global e-commerce exports, as the rules of documentation and compliance are complicated. This draft suggests a third-party export model, in which a special export unit related to e-commerce platform will take care of compliance.
The Directorate and Amazon did not answer the questions of the Reuters. To implement this proposal, approval of India’s cabinet is needed. Amazon says that this will benefit Indian exporters, but the All India merchant Confederation opposed it. The Confederation says that foreign companies can take advantage of it wrongly and can take more control over the supply chain.
Suggestion to start on pilot basis
Confederation Chairman B.C. Bhartia said that this will make such a system that it will be difficult to track whether the goods are really for export or are being sold in the domestic market. The draft clearly states that these loose rules will be only for export and the punishment for breaking the rules will include strict penalty and criminal action. The Directorate has suggested to apply it to the first pilot basis and then increase it after the review.
Amazon had stated in December that it has helped in an export of $ 13 billion for Indian vendors since 2015 and plans to take it up to $ 80 billion by 2030. Last year, the Indian competition regulator found that Amazon broke the competition law by working with huge discounts and favorite vendors, although Amazon has rejected these allegations.