No relief in sight for ecomm firms ahead of elections

Ecommerce companies, seeking relaxation on the Centre's December 22 notification of restriction on the sale of their products from companies in which they have stake, will have to wait longer.

The Centre appears in no mood to disappoint its home-grown retailers, which is a substantive chunk of its vote bank.

Ecommerce companies had urged the government on the sidelines of Davos Summit for relaxation in norms which they said would not only reduce their sale but also dent profit.

The Centre's new FDI rules which will come into force from February 1, bar online marketplaces and their group companies from owning their vendors. The rules also debar them from controlling the inventory sold on their platforms.

Amazon and Walmart-owned Flipkart had sought a deferment of the February 1 deadline to which industry officials said that they were weighing an extension of at least two months.

However, officials said that any such relief was not in sight as of now. They said even if there was a relief, it would be for a limited period.

“The government is no mood to upset its traditional vote bank of retail and mom-and-pop store owners,” an official privy to the development said.

The official accepted that many of the online retailers have written to the government seeking a deferment of the deadline as it was difficult even to comply so soon but, he said, there was no movement on this front.

But contrary to that many of the small online retailers like ShopClues, Snapdeal and Shop101 have opposed the extension of February 1 deadline.

Confederation of Indian Traders too has opposed the extension of the deadline.

Officials said that the government believed this was the last ditch opportunity for the Centre to appease small traders, who went against the Modi government after demonetisation and implementation of GST.