New E-commerce rule will affect our business says Amazon and Tata

Amazon.com Inc and India’s Tata Group warned government officials on Saturday that plans for tougher rules for online retailers would have a major impact on their business models, four sources familiar with the discussions told Reuters.

At a meeting organised by the consumer affairs ministry and the government’s investment promotion arm, Invest India, many executives expressed concerns and confusion over the proposed rules and asked that the July 6 deadline for submitting comments be extended, said the sources.

New rules limiting flash sales, barring misleading advertisements and mandating a complaints system, among other proposals, could force the likes of Amazon and Flipkart to review their business structures, and may increase costs ford domestic rivals including Reliance Industries’ JioMart, BigBasket and Snapdeal.

Amazon argued that COVID-19 had already hit small businesses and the proposed rules will have a huge impact on its sellers, arguing that some clauses were already covered by existing law, two of the sources said.

The Tata executive said the rules will have wide ramifications for the conglomerate, and could restrict sales of its private brands, according to two of the sources. Tata declined to comment.

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