Posted on : August 4, 2018

The e-commerce sector is likely to see significant changes in the coming months. The recently-unveiled draft e-commerce policy has several key recommendations, including barring group companies of e-commerce players from “directly or indirectly influencing” sale prices. This may mean restrictions on retail strategies of e-commerce majors with subsidiaries – that includes names like Amazon, Flipkart as well as Ola, Swiggy and other consumer internet services.

The policy also suggests Indian owned and Indian-controlled online marketplaces be allowed to hold inventory as long as products are 100% domestically produced.  This relaxation on marketplace ecommerce firms is not available for entities controlled by foreign investment.

For Indian founders with minority stakes, the draft suggests there should be differential voting rights giving founders more control. It defines an Indian ecommerce firm as that where foreign investment doesn’t exceed 49%, where the founder/promoter is a resident Indian, and the platform company is controlled by Indian management.

The draft suggests a separate wing be set up in the Enforcement Directorate to handle grievances related to Press Note 3, which details guidelines for foreign investment in e-commerce.(Story Courtesy-The Economic Times)