Cutting Big e-tailers to Size

Just before the new year set in, e-commerce firms in India were in for a rude shock. New foreign direct investment (FDI) guidelines in e-commerce announced in December by the Department for Industrial Policy and Promotion (DIPP) put e-tailers in a quandary. The guidelines explained a 2017 circular on the operations of online marketplaces-where 100 per cent FDI has been allowed-debarring online retailers such as Flipkart and Amazon from selling products of companies in which they own stakes and disallowing them from entering into exclusive deals for merchandise. Moreover, starting February 1, e-commerce companies cannot enter into agreements for the exclusive sale of products on their sites. The Press Note 3, where these norms were explained, prompted the large players to seek relief from the government. The trading community operating physical or online stores, though, consi­dered the move beneficial, ostensibly the result of pushing the government for months to create a 'level playing field'.