June 01 2020
Centre firm on FDI rules deadline
01 February 2019

New norms take effect today; Amazon to ensure minimal impact on consumers

The government on Thursday said it would not be extending the deadline for implementation of the new rules governing FDI in e-commerce. The new rules will come into effect on Friday as per plan.

“The department had received some representations to extend the deadline of February 1, 2019 to comply with the conditions contained in the Press Note 2 of 2018 series on FDI Policy in e-commerce issued by the Department,” the Commerce Ministry’s Department for Promotion of Industry and Internal Trade said in a notification.


“After due consideration, it has been decided with the approval of the competent authority not to extend the above deadline.” Large e-commerce firms such as Amazon and Flipkart have repeatedly approached the Centre seeking either dilution of the rules or extension of the deadline. “While we remain committed to complying with all laws and regulations, we will continue to look to engage with the government to seek clarifications that help us decide our future course of action as well as minimise the impact on our customers and sellers,” an Amazon spokesperson said. The new rules ban any firm that has any stake owned by an e-commerce company from selling on the platform run by that e-commerce company. Further, no company that has 25% or more of its purchases from an e-commerce group firm may sell on that firm’s platform.

The decision not to extend the deadline has been welcomed by traders’ bodies and home grown platforms such as Snapdeal and ShopClues, which have been campaigning vigorously for this outcome.

CAIT sought setting up of a regulatory authority to oversee strict implementation the policy.

‘Win for MSMEs’

Sanjay Sethi, CEO & co-founder, ShopClues, said the move was a win for small enterprises, moving them a step closer to a level-playing field. “It also sends strong message to violators that legal jugglery, exploiting loopholes and in general disregard for the law will have to stop now.” A Snapdeal spokesperson said adherence to rule of law would allow India to create a robust e-commerce sector, which will ensure lasting gains for both buyers and sellers.



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