As the new E-commerce rules came into effect in India on February 1, e-commerce major, Amazon.com has withdrawn many Indian products from its website.
Some of the products include Echo speakers, batteries and floor cleaners. Two sources with direct knowledge of the matter said the products began to disappear from the Amazon India site late on January 31 as it began complying with the revised norms before a midnight deadline.
Amazon has no choice as the company has to fulfill a compliance requirement. But it is said that ultimately customers who enjoyed big discounts is going to suffer.
In December, India modified foreign direct investment (FDI) rules for its burgeoning 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's 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.
For example, Cloudtail, in which Amazon holds an indirect equity stake, has stopped selling their products on the Amazon India site. Clothing from Indian department store chain Shopper's Stop was also no longer available, as Amazon owns 5 percent of the company.
Amazon's own range of Echo speakers, its Presto-branded home cleaning goods and other Amazon Basics products such as chargers and batteries had also vanished from the website.
Both Amazon and Walmart had lobbied against the latest rules and pushed for a delay in their implementation, but India said the February 1 deadline stood.
But Prime Minister Narendra Modi's administration is seen as keen to appease small traders in the run-up to a general election due by May. Many small traders say the e-commerce giants use their buying power and control over inventory from affiliated vendors to create an unfair marketplace.