The Indian government is seeking details on the way new-age ecommerce companies operate and as part of its inquest has asked top internet firms Flipkart, Amazon, Snapdeal, among a number of others to submit detailed reports to the Ministry of Commerce and Industry, explaining their company structures and business operations in India.
This is the first such instance of the government seeking such clarification and comes on the back of several complaints by seller bodies and other rival players alleging that these companies have regularly violated laws that govern the sector.
Some of the companies that have made this submission include Flipkart and Snapdeal while Amazon is still in the process of doing so.
“The ministry had asked for details on the company structure during our meeting with Piyush Goyal, which we have submitted,” said an executive of a leading e-commerce marketplace on the condition of anonymity. “We have also given other details in the report like how many warehouses we are running, the number of sellers we work with, and our other investments in India,” a person familiar with the matter told ET.
This development comes days after the minister of industry and commerce, Piyush Goyal, said that the government is not considering any proposal to create an ecommerce regulatory authority to regulate and monitor ecommerce business in India.
Piyush Goyal told the Lok Sabha that measures to check malpractices by ecommerce companies including predatory prices and deep discounts are laid down in the Competition Act 2002, which inter alia also checks anti-competitive agreements, including vertical restraints.
Towards the end of last month, Piyush Goyal conducted a meeting with representatives of Indian ecommerce companies with an agenda to carry out an in-depth discussion on ways to boost the India ecommerce market and thus benefit both the small Indian retailers and ecommerce consumers.
But what has now come light is that during the course of the meeting, the minister instructed all the parties present to submit reports explaining their company structures and business models.
“The minister didn’t specify which companies need to comply with this demand, so we took a conservative approach and have sent a detailed report on our structure,” another executive was quoted as saying. Goyal had added that the submissions should be made within a week, after which it would be analysed by the ministry and presented to him before their next meeting.