India’s proposed ecommerce policy biased, favours local companies: USISPF : 09-08-2018

NEW DELHI: India’s proposed ecommerce policy is discriminatory and loaded in favour of local companies, a non-profit organisation working on India-US trade-related policies said.

“The current draft micromanages businesses. When you say how much discount to give and how much bulk you can sell, I think that’s going in the wrong direction… That’s a company’s decision,” said Mukesh Aghi, president of the US India Strategic Partnership Forum (USISPF).

Aghi said the country cannot have a policy that gives preference to local companies and puts up barriers for multinationals including Amazon and Walmart, which have lined up billions of dollars in investments for India. “They are the ones who bring technology, who bring money,” he said, responding to reports of provisions in the draft ecommerce policy.

The USISPF is a not-for-profit organisation that works with the Indian and US governments on trade related policy matters.

Aproposal in the draft policy recommends barring bulk purchases by “related party sellers” of branded goods like mobile phones and white goods that lead to price distortions in the marketplace. The policy proposes to restrict online marketplaces from not directly or indirectly influencing price of goods and services to their group companies.

A clause that defines the maximum duration of differential pricing strategies such as deep discounts is set to be introduced.

If such proposals are included in the final policy, the sale strategies of ecommerce companies Amazon and Flipkart will be affected. Amazon and Flipkart together account for over 70% of India’s ecommerce market. Both have large separate wholesale entities that purchase goods in bulk and then sell them to large vendors.

Source : Economic Times

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