The list of what e-commerce platforms aren’t allowed to do in India has been growing for some time, but the latest prohibition on flash sales has simply gone too far. If the rules get implemented, the entire business model of Amazon.com Inc. and Walmart Inc. could come unstuck before their investments in a market of 1.4 billion people can grow to a rewarding size.
While a lofty public purpose can always be tacked on as an afterthought to the most draconian of regulations, in this case the fig leaf is thinner than usual. It’s hard to see how “significantly reduced prices, high discounts or any other such promotions or attractive offers” for a period of time “limit customer choice, increase prices and prevent a level playing field.”
The real driving spirit behind the consumer affairs ministry’s new draft guidelines, currently open for public comment, may lie elsewhere. In the garb of checking manipulative behavior by online marketplaces, India is effectively muzzling the two leading U.S. players. It’s also tilting the balance in favor of offline commerce, and away from digital startups that are India’s best bet for rebuilding the pandemic-ravaged economy.
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