Amazon denies dodging Indian regulations⁠ but the government is already investigating and rivals want a ban on Jeff Bezos’ company

Amazon denies dodging Indian regulations⁠ but the government is already investigating and rivals want a ban on Jeff Bezos’ company
BCCL
  • A Reuters report revealed details about how the online retail giant tried to dodge India’s e-commerce regulations.
  • The company owned by Jeff Bezos, the world’s richest man, has hit back at the report “unsubstantiated, incomplete, factually incorrect”.
  • But the Indian trade minister has said that “there are certain complaints under investigation.”
  • Meanwhile, the Confederation Of All India Traders (CAIT), a lobby for small wholesalers and retailers, has called for a ban on Amazon.
E-commerce giant Amazon has hit back at a Reuters report that said that the company owned by Jeff Bezos, the world’s richest man, used several strategies to dodge India’s e-commerce regulations. The company has now lashed out calling the report “unsubstantiated, incomplete, factually incorrect”.


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However, the matter has already escalated. India’s commerce minister Piyush Goyal has reportedly said that, “there are certain complaints from consumers and small retailers about certain practices of e-commerce companies which are under investigation. We have sought several information. They are being looked into,” he said recently.

Goyal, who is known to have rapped the foreign e-commerce players in previous industry meetings, also asserted that “India’s e-commerce policy is robust and well designed and will not be changed.”
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At the same time, the Confederation Of All India Traders (CAIT), a lobby for small wholesalers and retailers, has called for a ban on Amazon. “It is a matter of shame on Amazon that it was least bothered and kept indulging itself into continuing its sinister designs to manipulate and control not only e- commerce but even the retail trade,” CAIT said in a statement.

The last thing that Bezos wanted

Online marketplaces Amazon and Walmart-owned Flipkart have been complaining about the recent changes in India’s e-commerce policy.
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Recent changesImpact
Consumer Protection (E-commerce) Rules 2020Labelling should mention expiry date of products and country of origin, along with the price.The platforms will also be liable for mis-selling and false advertising. The platforms will not be able to impose cancellation charges or to “manipulate the prices” by classifying or discriminating the customer.
Equalisation levyForeign e-commerce companies will pay additional 2% for revenue generated from Indian customers.

For almost two years now, the Modi government has been working on an e-commerce policy. The draft has already been shared with the e-commerce players in India. The policy will aim to regulate the booming e-commerce sector and also keep an eye on the role of foreign players.

The government is also under pressure from the offline traders⁠— who count among the traditional vote bank for the ruling Bharatiya Janata Party (BJP) government⁠— who claim that the online retail giants are driving them out of business.

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The Reuters report seems to back up some of these charges against Amazon. The report said that Amazon had preferential treatment towards sellers that it had a stake in – Cloudtail and Appario. “Two more sellers on the e-commerce giant’s India platform – merchants in which Amazon had indirect equity stakes – accounted for around 35% of the platform’s sales revenue in early 2019,” said the report.

Bezos, who promised to invest an extra $1 billion in India — taking the total committed investment in the country to $6.5 billion — on his last visit to New Delhi in 2020, has not seen the Narendra Modi administration soften its stance on foreign e-commerce players. The latest charge will further reduce the negotiating chips on the table for Amazon, which counts India among its biggest growth markets.

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