INSUBCONTINENT EXCLUSIVE:
Tata Group, Amazon have warned that new e-commerce rules will impact their businessesAmazon.com Inc and Tata Group warned government
officials on Saturday that plans for tougher rules for online retailers would have a major impact on their business models, four sources
familiar with the discussions told Reuters.At a meeting organised by the Consumer Affairs Ministry and the Government's investment promotion
arm, Invest India, many executives expressed concerns and confusion over the proposed rules and asked that the July 6 deadline for
submitting comments be extended, said the sources.The Government's tough new e-commerce rules announced on June 21 aimed at strengthening
protection for consumers, caused concern among the country's online retailers, notably market leaders Amazon and Walmart Inc's Flipkart.New
rules limiting flash sales, barring misleading advertisements and mandating a complaints system, among other proposals, could force the
likes of Amazon and Flipkart to review their business structures, and may increase costs for domestic rivals including Reliance Industries'
JioMart, BigBasket and Snapdeal.Amazon argued that COVID-19 had already hit small businesses and the proposed rules will have a huge impact
on its sellers, arguing that some clauses were already covered by existing law, two of the sources said.The sources asked not to be named as
the discussions were private.The proposed policy states e-commerce firms must ensure none of their related enterprises are listed as sellers
That could impact Amazon in particular as it holds an indirect stake in at least two of its sellers, Cloudtail and Appario.On that proposed
clause, a representative of Tata Sons, the holding company of Tata Group, argued that it was problematic, citing an example to say it would
stop Starbucks - which has a joint-venture with Tata in India - from offering its products on Tata's marketplace website.The Tata executive
said the rules will have wide ramifications for the conglomerate, and could restrict sales of its private brands, according to two of the
sources.Tata declined to comment.The sources said that a consumer ministry official argued that the rules were meant to protect consumers
and were not as strict as those of other countries
The ministry did not respond to a request for comment.A Reliance executive agreed that the proposed rules would boost consumer confidence,
but added that some clauses needed clarification.Reliance did not respond to request for comment.The rules were announced last month amid
growing complaints from India's brick-and-mortar retailers that Amazon and Flipkart bypass foreign investment law using complex business
The companies deny any wrongdoing.A Reuters investigation in February cited Amazon documents that showed it gave preferential treatment to
a small number of its sellers and bypassed foreign investment rules
Amazon has said it does not give favourable treatment to any seller.The Government will soon issue certain clarifications on the foreign
investment rules, Commerce Minister Piyush Goyal told reporters on Friday.
