No more exclusivity for e-commerce brand names as Indian Govt. revamps e-commerce rules to aid offline sellers

The Indian Federal government on Wednesday revamped its e-commerce norms in an attempt to bring a much-needed respite to offline seller and brand names, and moderate the unfair power yielded by e-commerce leviathans such as Flipkart and Amazon, largely through predatory prices in their mega sales. Under the new rules set by the Ministry of Commerce and Market, e-commerce companies are barred from offering products of the business in which they have stakes.

An entity having equity involvement by e-commerce market entity or its group business, or having control on its inventory by e-commerce marketplace entity or its group companies, will not be permitted to sell its products on the platform run by such market entity,”

Declaration from the Ministry of Commerce and Market

Online retailers are likewise restrained from mandating companies to sell their items specifically on their websites. This is a concern that is particularly widespread in the smartphone industry where phones are offered almost exclusively on either Amazon or Flipkart. This move by the Ministry of Commerce would be favored by the consumers as well as the offline retailers. Due to the fact that this way, consumers would not be restricted to one single entrance for the purchase of phones and could look at numerous choices before taking a choice. And making these items readily available to merchants might significantly enhance their sales.

This apart, the statement likewise points out that the cash back provides supplied by the group companies of market entity to buyers shall be reasonable and non-discriminatory. These companies are likewise needed to file a certificate and a report validating compliance of standards by September 30th of every year for the preceding financial.

This relocation by the federal government comes as an outcome of several grievances raised by local retailers on deep discounts used by online sellers. Especially during the joyful season where these online sales badly impede the sales of these offline sellers.