Amazon.com Inc and India’s Tata Group cautioned government officials on Saturday that proposed stricter regulations for online retailers would have a significant impact on their business models, according to four sources familiar with the discussions.
Many executives expressed concerns and misunderstanding about the new guidelines during a meeting organised by the consumer affairs ministry and the government’s investment promotion arm, Invest India, and requested that the July 6 deadline for submitting comments be extended, according to sources.
The government’s stringent new e-commerce rules, unveiled on June 21, have alarmed the country’s online merchants, particularly market leaders Amazon and Walmart Inc’s Flipkart.
New rules limiting flash sales, prohibiting misleading advertisements, and requiring a complaints system, among other proposals, could force Amazon and Flipkart to restructure their business models, while potentially increasing costs for domestic rivals such as Reliance Industries’ JioMart, BigBasket, and Snapdeal.
Amazon contended that COVID-19 had already had a significant impact on small businesses and that the proposed rules will have a significant impact on its sellers, saying that certain sections were already covered by existing legislation, two sources said.
The sources requested anonymity due to the nature of the discussions.