Moneycontrol
Last Updated : Jan 17, 2019 03:57 PM IST | Source: Moneycontrol.com

FDI in e-commerce: Flipkart, Amazon seek extension of February 1 deadline from government

While Amazon has asked for time till June, Flipkart has sought six more months

Moneycontrol News @moneycontrolcom

E-commerce companies such as Walmart-owned Flipkart and US-based Amazon have sought an extension of the February 1 deadline for complying with the Press Note 2, which the government issued in December, The Economic Times reported on Wednesday.

While Amazon has asked for time till June, Flipkart has sought six more months, as per the report.

"We remain committed to be compliant to all rules and regulations. We await clarifications from the government on the new policy changes. As we seek clarity, we have written to the government seeking 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," an Amazon India spokesperson told Moneycontrol.

Earlier this month, Moneycontrol reported that the government was open to discussions with the stakeholders with regards to the new FDI policy and would take a call nearer to the deadline.

In a politically opportunistic move, the government last month tightened norms for online retailers, making it more difficult for them to use their nearly endless stream of foreign capital to fund high discount, banned exclusive tie-ups and covered group companies into the ambit of FDI norms.

The government has also barred companies from selling products of entities in which they own stakes. This in principle bars entities like Couldtail and Appario from selling their products on Amazon.in. Cloudtail is the joint venture of Amazon and Narayana Murthy's Catamaran Ventures and also one of its important vendors.

The government which is also working on an e-commerce policy, didn't have a specific round of consultation with any stakeholder from the sector, including e-tailers and offline traders before announcing Press Note 2.

The e-commerce companies that have invested billions of dollars in the India market are also demanding a consultation driven framework.

According to the companies, it would be difficult to meet the February 1 deadline given that that regulation requires extensive overhauling of their business model. The $20 billion online commerce industry is a fraction of India’s $700 billion offline retail sector.
First Published on Jan 16, 2019 10:22 am
Loading...
Sections
Follow us on
Available On
PCI DSS Compliant