© Reuters. FILE PHOTO: The Amazon logo is displayed in the company's office in Bengaluru
By Aditya Kalra and Sankalp Phartiyal
NEW DELHI / MUMBAI (Reuters) – The rules of electronic commerce that took effect in India on Friday led to far-reaching disruptions for Amazon.com (NASDAQ :), it forced a series of articles from its Indian website, including echo speakers, batteries and floor cleaners.
. Two sources with direct knowledge of the matter said the products would disappear from the Internet Amazon India site late Thursday as it met the revised standards before the midnight deadline.
"The company has no choice, it meets a compliance requirement … customers will suffer," said one source. In December, India modified the FDI rules for its burgeoning e-commerce sector, which not only at Amazon.com, but also at Walmart (NYSE 🙂 Inc., which had bought a business last year, large stakes scored controlling stake in h omegrown e-commerce player Flipkart.
India's new ecommerce investment rules prevent online retailers from selling products through sellers in which they own equity and also from doing business with sellers to sell exclusively on their platforms.
Until Thursday, many articles that are indirectly owned by vendors, such as Cloudtail, in which Amazon holds an indirect interest, are no longer available on the Indian Amazon.
Clothing of the Indian department store Shopper's Stop was also no longer available, as Amazon owns 5 percent of the company.
Amazon's echo speakers, Presto house-cleaning products, and other Amazon Basics products, including chargers and batteries, also disappeared from the site.
Both Amazon and Walmart were against the latest rules and pushed for a late implementation, but on late Thursday, India said the deadline.
The US government has also urged India to protect the investments of the two American retailers, Reuters reported last week.
Both Businesses have been strongly committed to India as a major growth driver: Amazon has committed to invest $ 5.5 billion there, while Walmart spent $ 1
But the government of Prime Minister Narendra Modi wants to satisfy small traders in Turkey in the run-up to the elections due in May.
Many small retailers say the e-commerce giants are using their purchasing power and control over the inventory of affiliated vendors to create an unfair ketplace market, where they can offer deep discounts on some products. Such rules are excluded under the new directive.
According to industry, the new rules have forced the big e-sellers to change their business structures and compliance costs are rising.
Amazon India told Reuters it was "committed to abiding by all the laws of the country," adding that all sellers make their own independent decisions about what to list and when.
Exclusive deals with sellers are discontinued. said the two sources.
It is not clear how long the disturbance will last. Future buyers of echo speakers on Amazon India saw a message: "We do not know when or if this item will be in stock again."
The impact of the changes on Flipkart was not clear. She did not respond immediately to a request for comment.
In a letter to the Indian Industry Department in January, Kalyan Krishnamurthy, the chairman of the board, stated that Flipkart's rules are being demanded to test "all elements" of its business and cause "significant customer disruption".