Won’t tolerate violations of FDI norms, govt warns e-commerce firms

Union commerce minister Piyush Goyal has warned top executives of e-commerce companies that the government will not tolerate violations of the Press Note 2 guidelines that lay down foreign direct investment (FDI) compliance norms for online marketplaces.

In a meeting which went on till late last night, Goyal addressed the chief executives of close to 25 e-commerce companies, including Flipkart, Amazon India, Snapdeal, ShopClues, UrbanClap, Swiggy, and Zomato, among others.

According to industry representatives present at the meeting, the minister said that Press Note 2 guidelines will have to be followed in letter and spirit and added that if e-commerce grows at cost of MSME and kirana stores, the government will consider changes in policy to protect the latter’s business interests.

Among the topics addressed was Flipkart and Amazon’s move to create complex structures to get around the legal implications of violation of the Press Note 2 norms.

The discussion also included points on data privacy included in the draft national  e-commerce policy and submission of a third party auditor’s report certifying compliance with Press Note 2. The minister had previously met stakeholders from e-commerce companies and technology firms on June 18 to discuss issue of data localisation.

The latest meeting came a day ahead of US secretary of state Mike Pompeo’s visit to India, which includes a discussion on tighter government norms in connection with the draft e-commerce policy and localisation of payments data in the country.

The minister also asked the companies to submit their concerns and grievances to a committee comprising of representatives from the Department for Promotion of Industry and Internal Trade (DPIIT), Department of Commerce and the ministries of MSME and consumer affairs, apart from legal representatives from the government. The minister also said that a follow-up meeting will be conducted in a month’s time to review these submissions.