Amazon asks India to relax e-commerce law

E-commerce giant hopes the government will relax its law which currently prevents business-to-consumer (B2C) operators such as its Indian subsidiary Junglee.com from selling directly to customers.
Written by Jamie Yap, Contributor

U.S. e-commerce giant Amazon said it had asked the Indian government to consider relaxing an online retail law that currently forbids its Indian subsidiary, Junglee.com, from selling directly to customers.

Amazon's global vice president, Paul Misener, had met Indian Trade Minister Anand Sharma in New Delhi, India, Tuesday to discuss the issue, AFP reported Wednesday.

"We talked about [ending the ban on direct sales to customers]," Misener said. Amazon is "trying to find a better way to serve our Indian customers, both sellers and buyers", he added.

On whether Sharma has since made any commitment to change India's retail policy, the Amazon executive said: "The government of India has been very kind to Amazon.com and we continue to grow here."

Amazon entered India in 2012 with the launch of Junglee.com, but was not allowed to sell directly to local consumers.

Amazon entered the Indian market in February 2012 with the launch of Junglee.com, which is a modified version of its shopping portal where customers can search for products and compare prices.

The site offers millions of products from Indian and global brands, but buyers have to make their purchases through third-party suppliers either online or in person, AFP reported. As a price comparison site, Junglee.com currently only directs shoppers to other sites and vendors, instead of selling the products to them directly--allowing the Amazon subsidiary to sidestep government regulation that forbids online retailers from doing direct sales.

In 2012, the Indian government eased legislation to allow foreign retailers such as supermarket giant Wal-Mart to set up shop and sell directly to Indian consumers, but online retailers were not included, AFP noted. Analysts have observed India's e-commerce business is becoming more lucrative as consumer demand is driven up by a growing middle class in the 1.2-billion strong population, it added.

In a separate report by Business Standard Wednesday, the Indian government in September last year decided to keep foreign direct investment (FDI) on hold for online B2C (business-to-consumer) retail, while it allowed up to 51 percent FDI in brick-and-mortar retail businesses. There are no restrictions on FDI in B2B (business-to-business) online retail businesses, it added.

According to a previous ZDNet report last September, the government's decision to allow FDI in Indian retail came with a clause for e-commerce operations in the country, where local and international companies with foreign investment are not allowed to sell goods online.

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