India’s new e-commerce rules came effective from Friday which forced the Amazon to remove a wide range of products such as floor cleaners and sunglasses and to take down its key grocery service; also put its website under large scale disruptions.
Amazon, in order to meet the deadline of before Friday, began to comply with regulations on Thursday by removing products from its India website, two sources with direct knowledge of the matter told Reuters.
E-commerce sector in India is growing rapidly which pushed the ginats like Amazon.com as well Walmart Inc to invest further in the country and for the reason last year Walmart came out buying the majority stake in the local e-commerce player Flipkart, and the escalating e-commerce market witnessed modified rules for foreign direct investment in December.
Online retailers, under new e-commerce investment law of India, can no more use their platform to sell the products of those vendor in which they holds any equity interest, as well as dealing with sellers for exclusive business on the platform is also prohibited as per new law.
For compliance of new law, Amazon has discontinued number of products like Amazon Pantry, a grocery service run by its affiliates and Cloudtail, which have been removed from the Amazon’s India site.
India is one of the major markets of Amazon where during recent holiday season, company has enjoyed record profits and sales, but due to uncertainty in the country, Amazon has forecasted below than Wall Street estimates sales for the first-quarter.
New e-commerce policy came in response to the complaints from small Indian traders who were concerning strong position of the e-commerce giant having control over inventory from affiliates with ability to offer discounts, which are now be barred.
Amazon as well as Walmart, have lobbied against the policy and also put their efforts to even delay the process but did not succeeded as the its has been widely seen to be connected with the general election scheduled in May.
