Govt plans foreign investment rule changes that might hit Amazon

India is thinking about re-examining its foreign investment rules for online businesses, three sources and a government representative told Reuters. It would be a move that could force players, including Amazon, to rebuild their associations with some of their major clients. The Indian government has received huge number of objections from India’s bricks and mortar retailers. They have for quite a long time charged Amazon and Walmart Inc-controlled Flipkart of making complex constructions to sidestep government rules. These US tech giants have always denied such charges.

India permits foreign web-based business players to work as a commercial centre to interface dealers and buyers. It forbids them from holding inventories of merchandise and straightforwardly selling them on their platforms. Flipkart and Amazon were last hit in the year 2018 due to the changes in the investments rules that banished foreign businesses from offering merchandise from dealers in which they have an equity stake.

Currently, the government is thinking about changing a few arrangements to forestall some provisions, regardless of whether the e-commerce firm holds a circuitous stake in a vendor through its parent, the sources said. The sources requested not to be named since the conversations are private. The progressions could hurt Amazon as it holds direct equity stakes in two of its greatest online dealers in India.

Amazon says that e-commerce has created a colossal amount of job opportunities and is a huge supporter of small and local businesses. Amazon believes that any significant adjustments to the strategy will unfavorably affect these local businesses.