Amazon urges India not to change e-commerce investment rules

Amazon asked the Indian government on Thursday not to change e-commerce rules on foreign investment until an investigation into its business practices was completed, two media sources told Reuters.

The Department of Commerce has met with e-commerce players in the wake of allegations by retailers, which are an integral part of Prime Minister Narendra Modi’s support base, that Amazon and Walmart’s Flipkart have created complex frameworks to violate foreign investment laws and harm small traders.

Both companies deny that anything is wrong and say they are helping small businesses in India.

New Delhi has considered reviewing e-commerce rules for foreign investment for weeks. Their last transformation, in 2018, forced Amazon and Flipkart to re-use their business structures and reduced trade relations between India and the United States.

Last month a Reuters report, based on Amazon’s internal documents, revealed that the American company has for many years managed a small group of retailers on its platform, giving them discounted money and helping a person cut down on special deals with major technology producers.

Amazon said it “does not offer special treatment to any retailer in its markets,” and that it “treats all retailers in a fair, transparent, and non-discriminatory manner”.

During a meeting on Thursday, Amazon chief executive told Trade Department officials that the Competition Commission of India (CCI) and the Enforcement Directorate were investigating the allegations and “it is too early to make any policy changes” until those measures are complete, two sources direct the information. interviews he said.

An antitrust watchdog said the Reuters case confirmed the evidence they had about Amazon, while the federal anti-crime agency sought information and documents from Amazon.

Amazon, which said the meeting was in compliance with all laws, said any policy changes affecting existing funds could strengthen investor confidence around the world, and any disruption caused could “have a negative impact” on suppliers and small businesses, sources said.

Flipkart also demanded policy stability during the meeting, said one of two sources.

Amazon told Reuters in a statement that it welcomes the government’s consultation process and that foreign investment policy “needs to be stable and predictable investor confidence”. Flipkart declined to comment.

Meanwhile, Reliance Industries’s commercial unit, led by India’s richest man Mukesh Ambani, has called on the government to clarify the policy, saying complex legal frameworks have been used by some firms to break the law, a third source said.

Trust declined to comment.

As a domestic player, Reliance is not bound by rules that prevent companies like Amazon and Flipkart from owning products sold through local websites.

The rules also place additional restrictions on foreign players, prisoners detained in war and Reliance as it increases its e-commerce performance.

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