Government draft on e-commerce policy has become a matter of strong contention between e-commerce behemoths backed or owned by foreign investors, government and Mukesh Ambani-led Reliance Group. Expressing their disagreement over the draft that demands exclusive localisation of e-commerce data, and discounting, Flipkart and Amazon lobby for scrapping it completely.
Flipkart and Amazon are requesting the government to come up with a fresh draft as they see the current version unfavourable, reports Mint citing anonymous sources.
While representatives from Reliance were the part of the panel that proposed e-commerce policy framework headed by Union Commerce Minister Suresh Prabhu, Flipkart, Amazon, and Uber weren’t consulted by the panel.
Collectively, Flipkart and Amazon dominate about over 55 per cent ($18 billion) of $32.7 billion worth overall online retail market in India. It’s quite surprising that why the government didn’t ask their feedback before proposing the draft.
The e-commerce draft is slated to be thrown for public consultation soon. Although several government departments are having different opinions on the draft policy, NITI Aayog, the department of industrial policy and promotion (DIPP), and the ministry of external affairs have been pushing for it.
As general election is scheduled for next year, the BJP-led government seems to have favoured e-commerce policy towards local business giants, particularly Reliance. BJP wants to reflect that it’s the party who stand for protecting the interest of Indian companies.
But, why Reliance is batting against likes of Flipkart, Amazon, and Uber?
Actually, Reliance has been emphasising that India should not be a colony of the US and China. According to a FactorDaily report, Reliance wants multinational corporations to abide by regulations. As of now, such companies have been circumventing or arm-twisting guidelines to exploit their business motives.
For an instance, WhatsApp has been alleged by Paytm and government agencies for circumvention while preparing for WhatsApp Pay (UPI).
For Reliance, if the e-commerce draft gets approval by the cabinet in the current form, Reliance Jio will benefit immensely. The group has lofty ambitions in digital business. After disrupting telecom, the group eyes e-commerce segment through a hybrid model (combination of offline and online channels).
It’s also entering the digital content business. The company had already bought music streaming major Saavn. Since Jio aspires to become country’s largest digital entity in years to come, manipulation of policies influencing its stakes in digital segment is imminent.