The Indian government shall prohibit ecommerce and food delivery companies from selling products and services of related parties or associated enterprises to registered merchants on their platforms.
Regulations to Ban Cross-selling by Ecom & Food-Delivery Companies in Discussion
This would mean that the ecommerce companies like Flipkart and Amazon India would not be allowed to offer ancillary products and services such as in-house logistics or payment products to merchants.
As per the sources, the food firms like Swiggy and Zomato would also come under the purview of this proposed regulation.
However, it is not the first time that such regulations are discussed in 2021. Last time when these were discussed, it was protested by the e-retailers who had said that such rules would affect their operations and brands materially.
However, there is no independent verification of this development. There has been no response from Swiggy, Amazon, Flipkart.
The deliberations on the proposed regulations are being led by the Consumer Affairs Ministry. As per the reports, the inter-ministerial discussions with the Department for Promotion of Industry and Internal Trade, and the Ministry of Electronics and Information Technology have also taken place.
The proposed regulation also seeks to ban the licensing of in-house brands to third-party sellers to sell online.
Consumers Affairs Ministry
The Ministry of Consumer Affairs, Food and Public Distribution is a government ministry of India. The ministry is headed by a Cabinet rank minister.
The ministry is divided into two departments, the Department of Food and Public Distribution and the Department of Consumer Affairs.
The objectives of the Department of Food and Public Distribution are to ensure:
• remunerative rates for the farmers.
• supply of food grains at reasonable prices through the public distribution system.
On the other hand, The Department of Consumer Affairs administers the policies for Consumer Cooperatives, price monitoring, essential commodity availability, consumer movement and control of statutory bodies such as the Bureau of Indian Standards(BIS) and Weights and Measures.
