New Delhi, Jan 04 :
Large e-commerce marketplaces could approach the government seeking extension of the February 1 deadline as compliance with the recent changes would require at least 4-5 months at operational level, according to multiple sources.
A senior executive at one of the big e-commerce companies said at least 4-5 months would be needed for players to re-work the operational aspects and February 1 deadline does not provide adequate time.
The rules were announced on December 26, giving companies just a month to execute these changes, which in many cases would require re-working existing partnerships and even, overhauling business models, the executive added.
Another official said companies are studying the recently announced amendments in detail and are likely to approach the government in coming weeks.
These representatives did not wish to be identified as the matter is sensitive. Emails sent to Amazon and Flipkart did not elicit any response. The government’s move to tighten norms has hit Amazon and Flipkart the hardest as the new regulations bar online marketplaces with foreign investment to sell products of companies where they hold stakes as well as ban exclusive marketing arrangements.
Another provision states that the inventory of a vendor will be seen as controlled by a marketplace, if over 25 per cent of the vendor’s purchases are from the marketplace entity, including the latter’s wholesale unit.
The move is aimed at ensuring that the marketplace entity or its related companies cannot control inventory under the FDI rules.
