Government has tightened certain norms for the eCommerce firms, such as Amazon and Flipkart on Wednesday. It has put forth several measures that bar eCommerce companies from selling products of companies they hold a stake in. Apart from this, The Commerce and Industry Ministry prohibited these companies from entering into agreements for the exclusive sale of products.
“An entity having equity participation by eCommerce marketplace entity or its group companies, or having control on its inventory by eCommerce marketplace entity or its group companies, will not be permitted to sell its products on the platform run by such marketplace entity,” stated the Ministry.
It was also said that the vendors should be provided with services on a marginal platform in a fair and non-discriminatory manner by the revised policy on foreign direct investment in retail firms. For the foregoing revenue the respective company every year by September 30 has to file a certificate along with the report of statutory body to reserve Bank of India for the confirmation of compliance of guidelines.
Right from February 1st2019, the notification by the ministry comes into force as a response to the complaints filed by the domestic traders on the heavy discounts given by these companies to the consumers. Also, 100% FDI is permitted in market place eCommerce activities according to the current policy. It is prohibited in the industry based activities.
According to the survey conducted the, Indian e-commerce market is expected to grow to $200 billion by 2026 from $38.5 billion. Additionally the online retail sales are expected to grow by 31 percent to touch $32.70 billion in 2018 led by Flipkart, Amazon India and Paytm Mall.