The government on Wednesday barred online retailers such as Flipkart and Amazon from selling products of companies in which they own stakes and disallowed them from entering into exclusive deals for merchandise, unveiling norms that industry figures warned could upend India’s $18 billion e-commerce industry.
Barring e-commerce marketplaces from selling products of firms in which they own stakes could hit Amazon in particular, given that it has several such joint ventures, including Cloudtail and Appario. Cloudtail is a joint venture between Amazon and N.R. Narayana Murthy’s Catamaran Ventures.
The commerce and industry ministry’s decision to introduce the new norms follows complaints by small traders, who contend that deep discounts offered by the likes of Amazon and Flipkart are driving them out of business. The issue is of crucial importance for the government, given that national elections are due by May and traders are a core voter base for the ruling Bharatiya Janata Party.