India will announce a new draft policy for e-commerce in a few weeks, a source in the government said on Thursday, a day after the country tweaked foreign investment rules for the burgeoning sector.
The new e-commerce policy could entail provisions for a regulator in the sector dominated by US tech giant Amazon.com and homegrown Flipkart, which was bought over by retail giant Walmart for $16 billion (roughly Rs. 1.1 lakh crores) earlier this year.
The Indian government also said that the companies will be prevented from entering into exclusive agreements with sellers. The new rules will be applicable from February 1.
“An entity having equity participation by e-commerce marketplace entity or its group companies, or having control on its inventory by e-commerce marketplace entity or its group companies, will not be permitted to sell its products on the platform run by such marketplace entity,” the commerce ministry said in a statement.
E-commerce companies can make bulk purchases through their wholesale units or other group companies that in turn sell the products to select sellers, such as their affiliates or other companies with which they have agreements. Those sellers can then sell the products to other companies or direct to consumers, often at attractively low prices.