Friday, 25 January 2019 08:54

US push on Indian e-commerce rules to help Walmart, Amazon

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US push on Indian e-commerce rules to help Walmart, Amazon Pixabay

The US is trying to intervene in technology regulation in India, this time telling the government that proposed rules on e-commerce will affect plans by Walmart and Amazon to invest in the country.

Reuters reported that the rules, which will come into force on 1 February, make it illegal for companies to hawk products through firms in which they have an equity interest. Additionally, companies will not be permitted to cut deals for any other seller to push products exclusively on their platforms.

The rules are of concern to Walmart, which invested US$16 billion in Indian e-commerce outfit Flipkart. It would also affect Amazon, forcing a change in business make-up resulting in a rise in operating expenditure.

Amazon has pledged to invest US$5.5 billion India and its owner, Jeff Bezos, has met Indian Prime Minister Narendra Modi a number of times.

This is not the first time the US companies have sought a light touch when it comes to regulation in India. In October last year, two US Senators were reported to be pushing India to water down its laws on localisation of data storage.

And in August 2018, it was reported that global payments firms MasterCard, Visa and American Express were lobbying the Indian Government to avoid having to store customer data locally by 15 October.

The push for the e-commerce rules to be adopted without any delay is coming from Modi as the rules will favour small businesses and could influence voting intentions in the forthcoming general election that has to be held by May.

The report said an US Government official had told some of his Indian counterparts to protect the investments made by Walmart and Flipkart in India.

The source who provided this morsel of information added that the American bureaucrat stressed the "good relations" between the two countries and hinted that US firms should be favoured to ensure better overall bilateral trade, but the Indians did not make any commitment.

Indian small businesses have been complaining for a long time that big e-commerce outfits are using predatory pricing to push them out of the market. The new rules would nip any such efforts in the bud.

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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