Ama­zon in Lone Bat­tle to De­lay Ecomm Norm Roll­out

Lobby group wants more time as Ama­zon ven­dor may fail to meet key mar­ket­place pol­icy re­quire­ment; ri­vals not in­ter­ested

The Economic Times - - Front Page - The one area that de­serves at­ten­tion is the way in which In­dia and US can work to­gether to re­solve global prob­lems

Chaitali Chakravarty

& Ra­sul Bailay

New Delhi: The ecom­merce in­dus­try’s re­sponse to new gov­ern­ment rules is boil­ing down to a tug of war be­tween Ama­zon ver­sus the rest. That’s the way it seems go­ing by a draft let­ter cir­cu­lated by the In­ter­net and Mo­bile As­so­ci­a­tion of In­dia (IAMAI) lobby group among its mem­bers at the be­hest of Ama­zon In­dia.

The draft seeks time un­til Septem­ber to com­ply with re­quire­ments for ‘mar­ket­places’, the busi­ness model fol­lowed by the coun­try’s big­gest ecom­merce com­pa­nies —Ama­zon In­dia, Flip­kart and Snapdeal. The key seems to be the stip­u­la­tion that one ven­dor can’t ac­count for more than a fourth of sales on a plat­form—Cloud­tail, part-owned by Ama­zon, is a big seller on the mar­ket­place.

One ven­dor can’t ac­count for more than a fourth of sales on a plat­form, ac­cord­ing to new mar­ket­place pol­icy

“On be­half of the in­dus­try, we would like to state that the ecom­merce com­pa­nies al­ready op­er­at­ing un­der this model would re­quire some time to ex­am­ine the pro­vi­sions in greater de­tail and as­sess the im­pact, if any, on their busi­ness,” says the draft let­ter, which ET has seAm­bas­sador Wil­liam ‘Bill’ Burns, en. “This might in­clude mak­ing first nec­es­saryas Un­der ad­just­mentsSec­re­tary of and State changan­des in then ex­istin­gas Deputy op­er­a­tional Sec­re­tary prac­tiof State,ces to con­tribut­ed­com­ply in to let­terthe ex­pan­sio­n­and spirit of with the the Indo-US con­di­tion­al­i­ties­part­ner­ship un­der ex­plicittwoly de­tailed dif­fer­ent in Pres­i­dents.the press note.” How­ever,

Ama­zon In­dia did not re­spond to an Burns be­lieves that as partnership email ask­ing if it needed time to be ma­tures,in line withit will the be new dif­fi­cult rules to and repif the­li­catere were dra­matic dif­fer­ences ini­tia­tive­son this like be­tween­the civilianthe com­pany nu­clear and deal. its In two an main in­ter­view ri­vals. withTo all Di­pan­jan­queries in Roy general, Chaud­hury Ama­zonon Inthe dia eve has of al­wayshis visit said to it’s Delhi in to com­pli­an­launch In­di­ace with chap­terthe law­sof Carnegieof the land.(of which

Flip­kart said it con­formed to the he rules.is the “We Pres­i­dent),have al­ways Burns been says compthat a liant real strate­gi­cof all rules part­ner­shipand reg­u­la­tions­be­tween ma­jo­rand will pow­ers con­tin­ueis not to just ad­here­about oneto the off new ini­tia­tives guide­lines but al­soas well,” about a prac­ti­cal spokeap­pli­ca­tion­sper­son saidin com­bat­in­gin an email. ter­ror­ism Snapdeal which de­clined threat­ento com­ment.lib­eral demo­cratic No agree­ment has been reached so­ci­eties.on send­ing Ex­cerpts:the let­ter be­cause Ama­zon’s ri­vals aren’t too keen on What’s back­ing your the as­sess­ment­plea, said sev­er­alof the part­pe­on­er­ship­ple aware sinceof the 2005 mat­ter.civil nu­cle­arThey be­liedeal? There’sve they no are ques­tion al­ready that com­pli­ant­the civil and nu­cle­ar­such a deal re­quest was a would dra­mat­icbe “bad achieveop­tics,” said one of them. ment. What was — and re­mains IAMAI is a lobby group with — mem­bers re­mark­able rangingis the pro­found­from tech bi­com­par­ti­san­pa­nies to sup­port ecom­merce­for the agree­ment. com­pa­nies, De­spite in­clud­ing the con­tro­ver­sythe three cited pro­voked above. by The its draft re­ver­sal let­ter,of long-standin­gad­dressed to US the non-pro­lif­er­a­tionDepart­ment of In­dus­tri­alpol­icy, the agreePro­mo­ment was ap­proved by an over­whelm­ing ma­jor­ity in the House of Rep­re­sen­ta­tives and by unan­i­mous con­sent in the Se­nate. PM Singh al­most lost his gov­ern­ment over the deal, but his poll suc­cess in 2009 proved that In­di­ans too over­whelm­ingly sup­ported strength­ened ties. tion and Pol­icy (DIPP), be­gan cir­cu­lat­ing among mem­bers on March 30.

Press Note 3 is­sued by DIPP on March 29 al­lowed 100% for­eign di­rect in­vest­ment (FDI) in mar­ket­places, clear­ing up am­bi­gu­ity about the busi­nesses that Ama­zon, Flip­kart and Snapdeal op­er­ated in In­dia. But while defin­ing the term mar­ket­place for the first time, it barred such plat­forms from of­fer­ing dis­counts on their own or in­flu­enc­ing sell­ers in any man­ner be­sides lim­it­ing sales by a ven­dor or a group com­pany to 25%.

“In the wake of such even­tu­al­i­ties, we re­quest the depart­ment to kindly ex­tend the date of im­ple­men­ta­tion of the no­ti­fi­ca­tion from its cur­rent date of 29 March 2016 to 30th Septem­ber 2016,” said the draft let­ter ad­dressed to DIPP joint sec­re­tary Atul Chaturvedi, who signed the Press Note. IAMAI pres­i­dent Subho Ray de­clined to com­ment. Snapdeal co­founder Ku­nal Bahl had wel­comed the new rules as soon as they were is­sued, say­ing the com­pany al­ready con­formed to them. Its po­si­tion is that clar­ity should be sought on spe­cific is­sues and seek­ing blan­ket six-month de­lay won't be help­ful, said some of those cited above.

Peo­ple familiar with Ama­zon In­dia’s op­er­a­tions said Cloud­tail ac­counts for well over 25% of sales on the plat­form. Cloud­tail is a joint ven­ture be­tween Ama­zon Asia and In­fosys founder NR Narayana Murthy's per­sonal in­vest­ment ve­hi­cle Cata­ma­ran through hold­ing com­pa­nyis not just Pri­one­about one-off Busi­ness ma­jor Ser­vices.ini­tia­tives but also about the prac­ti­cal ap­pli­ca­tion of the partnership across the wide ar­ray of is­sues where our in­ter­ests in­creas­ingly con­verge — from build­ing or­der and pros­per­ity in the Asia-Pa­cific to coun­ter­ing WMD pro­lif­er­a­tion and com­bat­ing ter­ror­ism. This, it seems to me, is the cen­tral task fac­ing both cap­i­tals.

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