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Amid tensions with China, India warns Amazon, Flipkart over country of origin rule

Synopsis

Amazon has often faced regulatory challenges in India. Last year, the government enforced strict rules for foreign investment in e-commerce which forced the U.S. retail giant to rework its business structures and strained ties between New Delhi and Washington.

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Amazon has often faced regulatory challenges in India.

MUMBAI: The Indian government has warned
Amazon.com’s local unit and Walmart’s
Flipkart that sellers on their platforms are not complying
with a
rule requiring that a product’s
country
of
origin be specified.

A push for strict enforcement
of the
rule has come
amid
tensions between
India and
China following a border skirmish which began in June, and is part
of
India‘s efforts to cut down on Chinese-made imports.

The two e-commerce firms have been given 15 days to explain the lapses or action will be taken against them, according to an Oct. 16 letter addressed to the companies from the Ministry
of Consumer Affairs and seen by Reuters.

It did not specify what action may be taken, referring only to a legal act that has provisions for fines.

Representatives for
Amazon and
Flipkart did not immediately respond to Reuters requests seeking comment outside regular business hours.

In addition to enforcing the
country
of
origin
rule, New Delhi has also banned 177 Chinese mobile applications since June while Chinese goods in ports have faced extra scrutiny and delays.

Amazon has often faced regulatory challenges in
India. Last year, the government enforced strict rules for foreign investment in e-commerce which forced the U.S. retail giant to rework its business structures and strained ties between New Delhi and Washington.

In January, the Competition Commission
of
India ordered an investigation into
Amazon and
Flipkart
over alleged violations
of competition law and certain discounting practices, which
Amazon is challenging, according to court filings.

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