New govt norms may end Amazon, Flipkart flash sales and discounts Flash sales, discounts may stop; Amazon, Flipkart could suspend selling products of subsidiaries
Flash sales on Flipkart or Amazon might soon be a thing of the past, and the ecommerce giants might also find it difficult to sell products of firms in which they have a stake.The Department of Industrial Policy and Promotion (DIPP) on Wednesday issued a set of additional guidelines for foreign direct investment (FDI) in the sector. Experts said this might not only curb the activities of e-commerce companies, but also prevent some of them, such as Flipkart, from raising any more FDI. The new regulations will take effect from February 1 next year, said the DIPP regulation.There are, however, no penal provisions, which means the government will not be able to prosecute any ecommerce firm that falls foul of the latest regulations.
“Despite this, we expect the latest changes to have a cascading effect on the industry,” a senior DIPP official said. He added that these new regulations may find their way into the policy itself. The DIPP is currently in the process of putting together a fresh draft of the proposed policy after the last one faced heat from both companies and civil society alike. The department has also prohibited e-commerce companies from entering into an agreement for exclusive sale of products. “An entity having equity participation by an e-commerce marketplace entity or its group companies, or having control on its inventory by a e-commerce marketplace entity or its group companies, will not be permitted to sell its products on the platform run by such a marketplace entity,” the DIPP circular said.Amazon, Flipkart stake claim to be No.1 etailer as festive sale ends
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