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Products disappear from Amazon India as new e-commerce rules come into force

The new e-commerce investment rules bar online retailers from selling products via vendors in which they have an equity interest

Friday February 1, 2019 9:31 PM, Agencies

Amazon India

New Delhi/Mumbai: India’s revised e-commerce rules caused widespread disruption on Amazon’s India website when they kicked in on Friday, forcing the company to take down its key grocery service and remove a wide range of products such as sunglasses and floor cleaners.

The products began to disappear from Amazon India late on Thursday as it began complying with the regulations before a midnight deadline, two sources with direct knowledge of the matter told Reuters.

In December, India modified foreign direct investment rules for its burgeoning e-commerce sector, which has drawn major bets from not only Amazon.com but also the likes of Walmart Inc, which last year bought a majority stake in homegrown e-commerce player Flipkart, Reuters reported.

The new e-commerce investment rules bar online retailers from selling products via vendors in which they have an equity interest, and also from making deals with sellers to sell exclusively on their platforms.

“We remain committed to complying with all laws and regulations, we will,” said Brian Olsavsky, the chief financial officer at Amazon.com.

“We are evaluating the situation. Our main issue and our main concern is trying to minimise the impact to our customers and sellers in India", he added.

Key players to be affected because of the new e-commerce policy will be the group companies and affiliates of these companies, including CloudTail, WS Retail, Myntra, and private label brands such as Amazon Basics and Flipkart’s MarQ. Consequently, many of the Amazon’s private label products have already been taken off from the company’s India website.

According to a quick estimate, more than 400,000 items that account for nearly a 3rd of Amazon’s $6 billion in annual sales in India will probably disappear at least temporarily from the company’s service in India.

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