The government's new foreign
investment restrictions for its e-commerce sector, which includes giants such
as Amazon.com Inc and Walmart-owned Flipkart, could reduce online sales
by $46 billion by 2022, according to a draft analysis from global consultants
PwC seen by Reuters.
Under the changes, e-commerce firms
in the country from February 1 will not be able to sell products
via companies in which they have an equity interest or push sellers to sell
exclusively on their platforms.
Announced in December, just months
before a general election due by May this year, the rules were seen as an
attempt by Prime Minister Narendra Modi's government to appease millions of
small traders and shopkeepers, who form a key voter base and say their
businesses have been threatened by global online retailers.
Industry sources told Reuters the
policy would delay or derail some investment plans and push companies such as Amazon and Flipkart to
create new, more complex business structures.
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