Amazon in India - end of the free run or just another day at office ?

When did you last heard that a globally renowned company is willing to invest USD 1 Billion (approx. Rs. 7,000 Crores) in India and forget the Prime Minister or the Cabinet Minister, even no senior bureaucrat is taking out time to meet the company’s owner.

Loved the way India is giving an absolute cold response to Amazon’s tactics. The company has long used its financial and political reach to mould the Indian policies in its favour, good to see the same finally coming to an end.

However, at the outset and for the sake of balancing out the perspectives, I’m not against Amazon. E-Commerce is a great channel for retail sale however, we can’t let Amazon or Flipkart or any other e-commerce entity to enjoy reaping the income while passing off the liabilities to sellers by quarantining themselves within the grey areas of laws giving them safeguards.

They claim themselves to be intermediaries or simply platforms and thus take no onus on themselves in case of product failures, late deliveries, counterfeiting; the consumer is simply asked to deal directly with the seller who was authorised by them only to sell their merchandise. 

Whenever Indian Government tries to initiate some corrective measure to put a check on this rampant misuse of grey areas in existing laws, the e-commerce companies go all out against any new law or rule.

The government first decided to come up with rules for guiding e-commerce trade in India somewhere in February 2019 when Department for Promotion of Industry and Internal Trade (DPIIT) came up with Draft for National E-Commerce Policy.

The draft policy had several stringent provisions that would have ensured that e-commerce entities are law bound to assume some responsibilities within their scope.

Important provisions like taking permission from the manufacturer / trade mark owner before putting the goods for sale, sharing with customers the purpose and use of data collected from them, ensuring guarantee of authenticity and genuineness of products sold, transparency in reviews and ratings of products etc.; were included under the scope of e-commerce entities.

Amazon being the key player in Indian e-commerce scenario, was flabbergasted. In a peculiar case of coincidence, a visit to India by US Commerce Secretary - Wilbur Ross got planned in May 2019 and discussions were conducted with the then Industry & Commerce Minister – Sh. Sursh Prabhu where amongst other issues the proposed e-commerce policy was also discussed. Needless to mention, the policy never got implemented as maintaining the international trade relations took precedence.

Come August 2019 and the Indian Government enacted the much-awaited Consumer Protection Act 2019, the upgraded version of the obsolete Consumer Protection Act 1986. Clause 94 of the Consumer Protection Act, 2019; mandates that the government can take measures to prevent unfair trade practices in e-commerce. Pursuant to the powers conferred by Clause 94 and Clause 101, the Department of Consumer Affairs, came up with the draft E-Commerce rules in November 2019.

The department is working actively on notifying the rules at its earliest and the same are expected to be gazetted within next 2 months’ time. This is where the next coincidence took place, a visit to India by none other than Jeff Bezos – the CEO of Amazon.

Bezos comes and make big promises – to invest USD 1 Billion in India, to generate 1 Million jobs and yet no warmth extended from the government side. As a matter of fact, Sh. Piyush Goyal – the Minister of Commerce and Industry even gave the strongest statement that has ever come from that office – “Amazon not doing favour by investing $1 Billion”, little harsh in my humble opinion.

The days ahead are going to be interesting. By making big promises, Amazon has surely started playing on the front foot, let’s see what the government does now. They have to balance out the expectations of small traders that are genuinely getting retired hurt by the onslaught of e-commerce entities as well as those of millennials who are increasingly becoming admirers of this new age shopping concept.

Will Amazon be able to finally “convince” Indian government that there’s no need to bring a strict policy or will the government be able to tell Amazon that your free run in India is over - देखेंगे हम लोग