Another day, another reminder of restrictions on Amazon and Flipkart in India. Regulators this week told e-commerce companies with foreign investment that they must follow rules that attempt to prevent them from heavily discounting items sold on their websites.
Prime Minister Narendra Modi’s government is seeking to protect local shopkeepers who may be at a disadvantage if e-commerce companies, funded by foreign investments, lure customers through discounts the small merchants cannot afford.
The meeting comes after the Indian government in February laid out regulations that forced Amazon to adjust its business practices. U.S. Secretary of State Mike Pompeo is scheduled to visit New Delhi this week, according to Reuters.
It appears the regulatory environment in India will only become more challenging for firms like Amazon and Walmart-owned Flipkart as they attempt to grow. Both companies are apparently making the argument that they offer logistics services to local merchants—a defense Amazon has used in the U.S. as well.