The government has begun work on a “India-specific model” for the likes of Amazon and Flipkart to collaborate effectively with mom-and-pop stores. The move is part of the government’s review of the draft consumer protection rules for e-commerce.
Over the last few days, commerce and industry minister Piyush Goyal, who is also in-charge of consumer affairs, and his officials have held multiple rounds of discussions with companies, both Indian and overseas, to understand the concerns with the draft guidelines that were released for public consultations.
Government sources said that there were two-three key areas, which needed to be tweaked, and the guidelines would seek to address the concerns. Some of the issues flow from the way the sector has evolved with different set of rules for homegrown players who do not face restrictions in selling directly to consumers, while overseas players face curbs. The draft rules on consumer protection were uniform irrespective of the ownership of the venture, but they impacted domestic players such as the Tata Group from selling some of their products on a “super app”.
Government officials, however, made it clear that there would be no compromise on protecting the interests of consumers, while ensuring that conflict of interest for the sellers is avoided.
The details of the new norms will be worked out in the coming weeks, but from the discussions over the last few months it has emerged that there can be an effective solution that can offer a “win-win deal” to e-tailers such as Flipkart and Amazon as well as kirana stores. It could lead to various models such as one where local stores are used to deliver goods and also join the network of sellers on these platforms, government and corporate sources said.
This also coincides with the dismantling of “non-compliant structures” like Cloudtail, a partnership between Amazon and Narayana Murthy’s Catamaran, which was the largest seller on the e-tailing platform. Earlier this week, Walmart, which controls Flipkart, had said that India had its own set of rules, which needed to the complied with.
For long the government has focused on getting e-marketplaces to comply with the foreign direct investment guidelines, which do not allow them to sell directly to consumers. While the restrictions are unlikely to be eased, there is growing realisation within the government that a model should be worked out to the benefit everyone.