Amazon Gets Slapped With Penalty As GOI Prepares To Tighten The Noose On Ecommerce Players!

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In a recent move, the Indian Government slapped Amazon on its wrist for not mentioning the country of origin detail for products listed on its platform.

According to a senior official from the Consumer Affairs Ministry, as this was the first offence of the e-commerce major, the company has been fined Rs 25,000 per director.

The newly established directive of the listing country of origin for e-commerce products was introduced in light of the growing Anti-Chinese sentiments in the country after the Indo-China border feud.

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Last month, the Consumer Affairs Ministry body, issued notices to Flipkart and Amazon as they were found not to be displaying the now mandatory information. Both the e-com players then replied back with explanations; while Flipkart’s reply was deemed satisfactory, Amazon’s reply was rejected.

The Consumers Affairs Ministry, in the notice, wrote that it had been brought to their notice that the e-commerce entities aren’t displaying the mandatory declaration on their digital platforms which is required under the Legal Metrology (Packaged Commodities) Rules, 2011.

After that, in similar wording, the ministry asked Flipkart India Pvt Ltd and Amazon Development Centre India Pvt Ltd needed to make sure they will take all the necessary steps to accomplish the task without delay.

Now, while this fine was not a humongous amount, it does, however, indicate that the GOI’s noose on e-commerce players is all set to get tighter in the near future.

No To Two Horse Race

A few days ago, it came to light that the Department for Promotion of Industry and Internal Trade aka DPIIT is now aggressively pushing for to formulate regulations around e-commerce in India.

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The DPIIT recently met with several bodies including Ministries of Consumer Affairs, Ministry of Information Technology (MeitY) and the Reserve Bank of India (RBI) to discuss its draft regulation which was first proposed last year in the month of February 2019.

According to industry sources, a second draft of the e-commerce policy of India certainly looking forward to the setting up of a regulator which is something many companies will resist. They also mentioned that the updated draft is being expected to also address how the e-com biggies Amazon and Flipkart have so far been functioning with fewer restrictions and almost free reign.

Along with that, the industry sources believe the finalised policy will incentivise local capital into the sector, restricting bulk buying of several goods in the category of electronics and fashion items and encourage local players to capture 51 per cent o more ownership of the e-commerce space the country.

All in all, it is clearly understood that the GOI doesn’t want a few handful players to run the entire space. Thus, the Indian Government is going to be stricter when it comes to holding e-com players responsible and imposing penalties on its shortcomings.

Now, how will the biggies Amazon and Flipkart react to it something that is yet to be known. We will keep you updated on all future developments. Until then, stay tuned.

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