Walmart and Amazon from the e-commerce eco system have sought a six-month extension

The government’s drastic intervention in e-commerce at the behest of vested domestic interests and the powerful traders lobby has created consternation in the bulge bracket world of e-commerce in India.

With the big players having reached out to the Government to give them breathing space on the new compliance measures beyond the January 31 deadline, the Industry ministry has not responded, leading to panic attacks across the board.

Powerful stakeholders led by Walmart and Amazon from the e-commerce eco system have sought a six-month extension since lakhs of sellers – small and medium-sized – in the market place need to be educated, IT-enabled and connected to meet the statutory audit requirements. Moreover, contracts have to be re-negotiated so that the compliance measures remain ongoing with time being of the essence.

It is believed that the DIPP or Industry Secretary Ramesh Abhishek, who was earlier encouraging the major players to ramp up their investments in India, has not responded to their pleas and petitions.

The situation has become precarious primarily because the clarification to press note 2 was even more confusing. On a granular level, the market place cannot have any equity in the seller.

Hence, Amazon which has five percent equity in Shoppers Stop has to comply with the new standards. The new government directive does not allow private labels, nor does it allow big brands to have commercial tie-ups with the market place. Basically, the rules of engagement have been turned on their head.

Bain Capital reckons that the heavy lifting e-com players have generated three lakh jobs in India. Over and above this, there are lakhs of vendors.

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