“Commerce Minister Piyush Goyal reportedly said that the government is open to listening to the concerns about the new foreign direct investment rules (FDI)”
Indian Government is said to have informed e-commerce firms such as Amazon and Walmart’s Flipkart that they must comply with the new foreign investment rules that are aimed at barring them from providing online discounts, according to sources familiar with the matter. Commerce Minister Piyush Goyal reportedly said that the government is open to listening to the concerns about the new foreign direct investment rules (FDI) and that it is committed to safeguarding small traders from international companies. To remind you, the Indian government back in February, imposed new e-commerce FDI rules to help small traders by controlling e-commerce giants who were said to have created an unfair marketplace by offering steep discounts.
Furthermore, small business groups now allege that e-commerce giants find a workaround to the federal rules by using complex business structure and spend billions to offer discounts. On the other hand, Amazon and Flipkart claim that they comply with the regulations and deny any wrongdoing. Goyal reportedly reiterated that any company should in no way violate new FDI policy. Flipkart CEO Kalyan Krishnamurthy in a statement said that the company is looking forward to work with the government and that Goyal had engaged “in a candid, positive and progressive” discussion. On the other hand, Amazon noted that it welcomed the “open and candid discussions and the promise of continuing engagement.”
The commerce ministry said that it had appointed a committee to listen to the grievances on issues related to FDI in e-commerce. Piyush Goyal is said to have had a series of meetings to iron out the FDI policy issues since last week. Moreover, Amazon and Flipkart urged they would provide logistics support and other services to small Indian retailers who use their e-commerce platforms to boost their businesses. According to a source, “Goyal said he doesn’t want uncertainty for businesses, he talked about having an inclusive policy that protects interests of all stakeholders.” Apart from the e-commerce rules, the Indian government ordered companies to store more of their data locally.