Amazon India, Flipkart seek extension to implement new FDI norms

16th Jan 2019
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With February 1 deadline approaching, ecommerce cos are seeking more time for implementing the revised FDI norms.

Ecommerce majors such as Amazon India and Walmart-owned Flipkart have sought an extension of the February 1 deadline for complying with the Press Note 2, which the government notified in December, media reports said on Wednesday. The Press Note 2 (2018) suggests that FDI in ecommerce is allowed only in B2B and not in the B2C sector.

While Amazon India confirmed to YourStory that it has sought an extension of four months, Flipkart didn’t respond to mails and text messages sent. Various media reports said that Flipkart has asked for six months of extension.

FDI norms
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An Amazon India spokesperson , said, “We remain committed to be compliant to all local laws, rules and regulations. We await clarifications from the government on the new policy changes. As we seek clarity, we have written to the government requesting an extension of four months. With over 4 lakh sellers and hundreds of thousands of transactions happening daily on the Amazon India marketplace, we need adequate time to understand the details of the policy.”

Even Internet and Mobile Association of India (IAMAI) welcomed Press Note 2 (2018) because it makes the market place model more robust and transparent. But it added, “it is not possible for online marketplaces to track or monitor all sales from any vendor, given a vendor is free to sell their products across multiple online platforms and even offline. Moreover, a bigger concern is when one calculates this benchmark of 25 percent sales. If platforms realise that this benchmark of 25 percent has been crossed, they cannot recall or cancel a transaction which has already taken place to rectify the situation.”

It added, “On the other hand, predicting this benchmark is an almost impossible task as platforms cannot have a definite measure of future sales from every vendor as it is completely dependent on the buyers’ choice. IAMAI thus suggests this provision be re-looked for a better drafting that is feasible for implementation.”

The updated FDI norms for ecommerce has also received mixed response from various stakeholders. While recently, the US-India Strategic Partnership Forum had said that the revised FDI norms show a lack of predictability in the Indian regulatory environment and could make their way into the long list of trade issues that the country is trying to resolve with the US, the Confederation of All India Traders (CAIT), a domestic lobby, has opposed any move to delay implementation of the norms.

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