New Delhi, August 05, 2018: Deep discount sales by online giants such as Amazon or Flipkart would be a thing of the past if the draft e-commerce policy is accepted by the government.
The draft policy seeks to provide a level playing field to online and offline players as it would bar any group company of an online retailer or a marketplace to directly or indirectly influence the price or sale of products and services on its platform.
The draft also recommends a sunset clause to address anti-competitive issues in e-commerce.
According to reports published in www.telegraphindia.com the draft said: “A sunset clause, which defines the maximum duration of differential pricing strategies (such as deep discounts) that are implemented by e-commerce platforms to attract consumers, would be introduced.”
Another strategy aims at restricting the ability of the online players to influence the prices of goods. “The restriction imposed on e-commerce marketplace, to not directly or indirectly influence the price of sale of goods and services, would be extended to group companies of the e-commerce marketplace,” the draft said.
The recommendation is part of an initial draft circulated among stakeholders to be followed by inter-ministerial consultations and public comment. The policy will be prepared after the public gave their views.
Commerce ministry officials said the whole process would take another 6 to 8 months if everybody sticks to the timeline, which is very rare in such cases.
The draft also recommended foreign direct investment (FDI) of 49 per cent in the inventory-based business-to-customer model of e-commerce. Currently, FDI in such businesses is prohibited and is allowed only in the marketplace model according to www.telegraphindia.com
The sale of country-made goods through online platforms would be promoted by permitting limited inventory-based business-to-customer model, where locally produced items would be sold through Indian owned e-retail companies.
The Retailers Association of India, representing offline retailers, including Future Group and Reliance Retail, had alleged that e-commerce companies were violating foreign investment regulations by influencing prices.