INSUBCONTINENT EXCLUSIVE:
foreign investment rules aimed at deterring them from providing steep online discounts, three sources familiar with the discussions told
Reuters.Commerce Minister Piyush Goyal has said that while the government was prepared to listen to concerns about its new foreign direct
investment rules (FDI), it was committed to protecting small traders from predatory behaviour by foreign-funded companies, the sources
said.The comments were made by Mr Goyal during a closed-door meeting on Monday with several e-commerce companies
It comes in a week when US Secretary of State, Mike Pompeo, is due to visit New Delhi - he is expected to arrive late on Tuesday - and trade
tensions have heightened between the two countries.India from February 1 imposed new e-commerce FDI rules to help hundreds of thousands of
small traders, but small businesses say there are still issues
They allege big online retailers use complex business structures to circumvent federal rules, and still burn billions of dollars to offer
discounts.Amazon and Flipkart say they've complied with the rules and deny any wrongdoing
Both companies, and the US government, protested against the rules in January, saying they would force firms to change their business
structures, Reuters has reported.Mr Goyal during the Monday meeting defended the government's new FDI policy, saying the rules should in
no way be violated by any company, both in letter and in spirit
The government will not allow e-commerce firms' discounting practices to affect small shopkeepers, Mr Goyal said, according to three
industry executives in attendance."The minister was clear and direct," said one of the executives.Flipkart CEO Kalyan Krishnamurthy in a
statement said the company looked forward to working with the government and Mr Goyal had engaged "in a candid, positive - progressive"
discussion.Amazon said it welcomed the "open - candid discussions - the promise of continuing engagement" with the government, adding it was
committed to supporting various government initiatives.In a statement on Tuesday, the commerce ministry said it had formed a committee to
hear grievances on issues related to FDI in e-commerce, adding it will ensure small retailers thrive in the country
It did not detail discussions around the question of steep online discounts.E-COMMERCE, TRADE CONCERNSThe government brought in the new
policy in February after complaints from small traders who said the e-commerce giants used their control over inventory from affiliated
vendors to create an unfair marketplace in which they offered major discounts
Such practices are now prohibited.The rules led to a brief disruption of Amazon's online operations in February and shocked Walmart, which
had just months before invested $16 billion in acquiring control of Flipkart in its biggest ever deal.The United States government and
Other than stricter e-commerce rules, India has demanded companies to store more of their data locally
In 2017, the United States lodged a written protest against country's decision to cap medical device prices.Mr Goyal has had a series of
meetings since last week with foreign and e-commerce firms and technology companies with an aim to iron out policy issues
He has also discussed what government press releases describe as "threats" local firms face from "large foreign competition".On Monday,
concerns around online discounts available on Amazon and Flipkart were discussed specifically during the meeting, with both companies asked
by government officials about how they price products online, the sources said.Amazon and Flipkart argued they provide logistics support and
other services to small retailers who use their e-commerce platforms to boost their businesses, said the third source who attended the
meeting."Mr Goyal said he doesn't want uncertainty for businesses he talked about having an inclusive policy that protects interests of all
stakeholders," said one of the sources.Get Breaking news, live coverage, and Latest News from India and around the world on
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