New regulations in India prevent greater E-commerce vertical integration. The rules prevent online retailers from selling products through vendors in which they hold an equity stake.
The regulations are expected to have a far-reaching impact on India’s e-commerce sector, which has drawn billions in foreign investment. Small retailers in India have long pushed for tougher competition rules, arguing the major players have an unfair advantage.
Amazon and Walmart, which own a majority stake in locally-grown platform Flipkart, both lobbied against the new rules. As a result Amazon has been forced to remove an array of products from its website in India to comply with new regulations. Amazon and Flipkart lobbied against the laws which aim to protect small businesses. Small retailers in India have long pushed for tougher competition rules, arguing the major players have an unfair advantage. Products have started to disappear from Amazon, as it scrambles to comply with the new rules.
Clothing from Indian department store chain Shopper’s Stop was also no longer available, as Amazon owns 5% of the company. Amazon’s own range of Echo speakers, its Presto-branded home cleaning goods and other Amazon Basics products such as chargers and batteries had also disappeared.
But Amazon and Walmart, which owns a majority stake in locally-grown platform Flipkart, both lobbied against the new rules.
The changes to foreign direct investment rules, which come into force on 1 February, also stop online retailers from making deals to sell exclusively on their platforms.
Source: BBC News