E-comm Rules: Clarifications Likely But No Change On Cards

The Centre may come up with some clarifications on Press Note 2 (of December 2018) to remove ambiguities in the provisions relating to e-commerce players, but will not change the rules framed specifically to plug loopholes in the policy that were being exploited by some FDI-funded marketplace players, a government official has said.

“Commerce and Industry Minister Piyush Goyal held a meeting on e-commerce rules on Monday and indicated that there will be no new rules to counter Press Note 2, but there could be some clarifications,” a government official told BusinessLine.

Foreign players, including Amazon and Walmart, were upset with the provisions of Press Note 2, issued by the Department for Promotion of Industry and Internal Trade (DPIIT), as they placed a number of restrictions on FDI-funded marketplaces.

The Note also prohibited such marketplaces from selling products of entities in which they have an equity interest. It also disallowed deals with brands to sell product exclusively on their platforms.

Moreover, Press Note 2 stipulated that the inventory of a vendor will be deemed to be controlled by the marketplace if more than 25 percent of the vendor’s purchases are from the marketplace entity, including its wholesale unit.

Goyal, in a previous meeting with e-commerce and social-media companies, had stressed that India will not allow multi-brand retailing by foreign companies.―The Hindu Business Line

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