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Report: Amazon, Flipkart seek to extend implementation of Indian e-commerce laws

Online retailers in India, including Inc. and Walmart Inc.-owned Flipkart Online Services Pvt. Ltd., are lobbying to extend the Feb. 1 deadline set by the Indian government for implementing new e-commerce regulations, The Economic Times (India) reported Jan. 4, citing two people with knowledge of the matter.

Under the new rules, e-commerce companies operating in India will no longer be allowed to sell products from businesses in which they hold a stake. The online marketplace or its group of companies also cannot have control over a merchant's inventory.

According to the report, the online retailers need to overhaul their business model to comply with the changes. Both Amazon and Flipkart control inventory directly or indirectly and they have vendors in which they have equity participation, the newspaper reported.

Amazon has been operating in India for years, investing billions of rupees in its Indian arm. Apart from its own marketplace, the Seattle-based company also partly owns Cloudtail India Pvt. Ltd., its joint venture with Infosys Ltd. co-founder Narayana Murthy's Catamaran Ventures.

Walmart in August 2018 completed its $16 billion investment in Flipkart, giving the U.S. retailer an expanded reach in the Indian market.

Flipkart and Amazon both said they intend to comply with the new rules, the report added.