E-commerce policy Update

Amazon and Walmart ’s grand plans for India were thrown into chaos on Friday after the country implemented new e-commerce regulations, which could cut their growth in the market by as much as half this year.

Prime Minister Narendra Modi’s government tightened rules for the retail giants after strident complaints from small shops and domestic sellers.Amazon  and Walmart’s Flipkart are now banned from cutting exclusive arrangements with sellers, offering deep discounts or holding any business interest in online merchants on their websites.

Thousands of products have already vanished from the virtual shelves of the duo, which together account for 70 percent of India’s online retail market.Walmart and Amazon have amassed vast inventories in companies in which they have business interests and had sought a four- to six-month extension to help offload those products. But the decision to go forward with the new rules on schedule was announced.

The new rules could wipe out nearly half the products on, said Satish Meena, an analyst at Forrester Research Inc. “It’s likely to disrupt availability for customers,” he said.

The biggest beneficiary from the tightened rules could be Reliance, which is India’s largest private company and owns the country’s biggest brick and mortar retail chain. Recently, it has spelled out ambitious plans to delve into ecommerce by getting millions of small sellers aboard a platform it’s created alongside its Jio wireless service.