India Tightens E-Commerce Rules, Amazon and Walmart Seen to Hurt Online Shoppers

Amazon and Walmart face new rules in India that might prevent them from using their industry experience and massive size to drive down prices.

Restrictions unveiled by the Indian government on Wednesday ban foreign e-commerce firms from offering their customers exclusive products like smartphones.

The new tips also seem to shut a loophole that had allowed foreign online retailers to sell their own product through affiliated firms.

Scheduled to take effect on February one, the rule changes reflect fears that enormous swathes the world's fastest growing major economy could come to be dominated by American companies.

"E-commerce entities providing marketplace won't directly or indirectly influence the sale value of products or services and shall maintain level playing field," the rules state.

Amazon (AMZN) has spent billions on its operations in India, and it bought 49th of a well-liked Indian supermarket chain in Sep.

Walmart (WMT) took control of Flipkart — India's biggest e-commerce company and Amazon's chief rival in the country — in May, spending $16 billion on a 77 stake.

The companies have created inroads by deploying a number of the strategies, including steep discounts and exclusive product offers, that created them flourishing in the united states.

A proponent for Amazon said the company was evaluating the new rules. Flipkart didn't answer a request for comment.

India has warily opened its doors to foreign investment in recent years, attracting a wave of international corporations eager to do business in the large market of 1.3 billion folks.

But unexpected rule changes and inconsistent enforcement have produced complaints from some foreign companies.

Akash Gupt, a partner at PWC who advises firms on government policy, said the govt was making {an attempt|attempting} to create an environment "where all traders get an equal opportunity to sell."

Some Indian firms praised the move.

"Marketplaces are meant for real, freelance sellers," Kunal Bahl, CEO of e-commerce firm Snapdeal, said on Twitter. "These changes will modify a level playing field for all sellers, helping them leverage the reach of e-commerce."