If you are waiting for a huge discount for shopping on e-commerce websites like Flipkart and Amazon, then there is some disappointing news for you. From midnight on the night of January 31, there will be a curb on E-commerce companies from running bumper discounts offered to customers during online shopping festivals. The revised guidelines for the e-commerce companies with direct foreign investment of the Ministry of Commerce and Industry will be implemented from 1st February.
Under this new rule, online retail companies like Amazon and Flipkart will not be able to sell the firm’s product on their platform, in which they will have a stake. That is, online companies will be able to sell only those products in which they do not have any role. Along with this, there will be restrictions on the sale of any of the online companies’ products exclusively. In lay man terms online e-commerce companies will not be able to sell any product (especially mobiles) exclusively on their platform.
At the same time, after the introduction of this new rule, online retail companies can not directly or indirectly affect prices of products and services. Apart from this, these companies will have to keep the lavel playing field (giving proper opportunity to everyone) on their platform. Not only this, online retailers will have to submit the auditor’s certificate to the Reserve Bank by September 30 every year. In this certification, the company has to comply with all the rules.
Why strict rules
Reasons for strict e-commerce companies are complaints made by offline retailers. Retailers allege that online retailers are giving huge discounts, causing their business to suffer. Following these complaints, the Ministry of Commerce and Industry has taken this decision.
Demand was to increase the time limit
The e-commerce companies had demanded the extension of the new rules, effective from February 1. Companies had to say that they needed some more time to understand the details of the rules. Amazon had asked the deadline to extend by 1st June and Flipkart by 6 months.