On Friday, E-commerce rules that went into effect in India caused a widespread disruption for 'Amazon.com'. The new rules have forced it to take down an array of items from its India website including Echo speakers, batteries and floor cleaners. The products began to disappear from Amazon India late on Thursday night as it began complying with the revised norms before the midnight deadlight, informed the two sources with direct knowledge of the matter. “The company has no choice, they are fulfilling a compliance requirement ... customers will suffer”, informed one of the sources.
In December, India had modified the Foreign Direct Investment (FDI) rules for its blooming e-commerce sector, which has drawn major bets from not only Amazon.com but also the likes of Walmart Inc, which last year bought a majority stake in homegrown e-commerce player Flipkart. India new e-commerce investment rules bar online retailers from selling products via vendors in which they have an equity interest, and also from making deals with sellers to sell exclusively on their platforms.
By Thursday, numerous items sold by vendors such as Cloudtail, in which Amazon holds an indirect equity stake, were no longer available on the Amazon India site. Clothing from Indian department store chain Shopper Stop was also no longer available, as Amazon owns 5 percent of the company.