Amazon and Flipkart have sought for more time to comply with the recently introduced amendments in the foreign direct investment (FDI) policy for e-commerce companies. In a circular issued on December 26, 2018, the central government had given a February 1 deadline to these e-commerce players to align their business model with the updated rules.
According to Economic Times, Amazon has requested for time till June 1 and Walmart-owned Flipkart has sought for six months.
"We are working diligently to assess all aspects of the Flipkart business in an effort to ensure full compliance with the new rules, but believe an extension is appropriate in order to ensure that all elements of the new Press Note are clarified and a smooth transition for marketplace participants occurs without any disruption for customers and small sellers," a spokesperson said.
The latest amendments introduced by the government calls for a slew of changes in the existing business model of these e-commerce players. These changes were made after the local trader's body complained that the foreign-owned online marketplaces were violating the existing norms.
The retailers alleged that these players were operating in violations of the existing rules and regulations by influencing the prices of products, indulging in heavy discounting and indirectly employing an inventory-based model.
In a letter to the Department of Industrial Policy and Promotion (DIPP), Amazon argued that the February 1 deadline would be too short for the company as the revised rules require an extensive overhauling of its business model and systems.
Amazon further added that the government had discussed with all the stakeholders when they introduced these policies and enough time was given to the players to make necessary changes. But this time, the DIPP did not consult with the market players and since there was a deliberate discussion, the company would need time to align with these changes.
Notably, the US-India Strategic Partnership Forum had also raised its concern over the rules and had said that it would hamper the FDI inflow in the country.
