Ecommerce companies Amazon and eBay have reportedly made recommendations to the government for policy changes in the revised Foreign Trade Policy (FTP) expected to come into effect from April 1, 2021.
According to a Business Standard report, the recommended policy changes talk about lowering the entry barrier for small businesses, which is expected to open up a market worth over $400 Bn. According to the report, citing industry sources, the present export policies cater to largely traditional, offline and business-to-business (B2B) exports.
The recommendations talk about implementing end-to-end digitisation and developing specialised logistics capabilities for exports related processes. They also talk about the need for simplifying compliances and regulatory requirements for building long-term capabilities.
“It is our submission that detailed inputs on these provisions should be included in the new chapter on e-commerce exports within the FTP. This will lay the groundwork for a robust ecommerce exports policy framework and will help India further its efforts in scaling experts through multiple channels,” an industry executive told Business Standard.
Last year, then Amazon chief Jeff Bezos had said that the company would invest $1 Bn to digitise India’s small and medium businesses (SMBs). The company has also partnered with kirana stores, selling groceries and other sundries, besides hosting events such as ‘Small Business Day’ on its India platform. Similar efforts have been made by Walmart-owned Flipkart in India.
Recently, Amazon has been embroiled in several controversies in India, as sellers’ associations have claimed that the company twists India’s ecommerce rules and regulations to give preferential treatment to select seller entities, namely Cloudtail and Appario, in which the company indirectly owns a stake.
India’s antitrust watchdog, the Competition Commission of India (CCI), is trying to open up a probe into Amazon and Flipkart’s anti-competitive practices. Meanwhile, a Reuters report last week reported a detailed account of Amazon’s allegedly fraudulent practices in India. Since then, the Confederation of All India Traders (CAIT) has demanded a ban on Amazon, also urging the government to constitute an ecommerce regulator for monitoring foreign ecommerce entities operating in the country.
As for eBay, the company first launched its India operations in 2004. In 2017, the US-based company’s India operations had merged with Flipkart, only for the partnership to break up in 2018. In 2019, the company relaunched eBay India, with a focus on B2C ecommerce retail export. That year, eBay also entered into a strategic partnership with Paytm Mall, along with acquiring a 5.5% stake in the company, to strengthen its India presence.