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India’s move to curb digital monopolies may affect Amazon, Walmart

India’s e-commerce laws that have been drafted to prevent the creation of “digital monopolies” and to help start a site can increase costs and halt expansion plans for companies such as Amazon.com Inc. and Walmart Inc.

The draft laws seek to determine the conduct of online retailers and define the flow of user information across borders, according to a note called the Draft Ecommerce Policy, a copy of which was seen by Bloomberg News. The government of Prime Minister Narendra Modi – which is facing complaints from its small retailers’ electoral body – has been imposing laws to reduce the dominance of Amazon and Walmart-owned Flipkart in the $ 1 trillion retail markets in India. The latest proposals build on laws that restrict two U.S. companies. Offering in-depth discounts, restricting special arrangements with popular retailers and investing in retailers who offer products on their websites.

The new e-commerce policy will address growth and aims to “reduce common market distortions,” the note said. The nine-page document formed the basis for a discussion of officials from various departments at a meeting on Saturday convened by the Ministry of Industry and Internal Trade in India’s Ministry of Trade and Industry.

Draft proposals seek to ensure that algorithms created by e-traders do not discriminate against vendors. They also demand that partners of companies including Amazon and Walmart be governed by the same e-commerce rules.

The sector has evolved rapidly and posed major regulatory challenges such as “maintaining a level playing field, the influence of autonomous tendencies and the need to keep relevant information to choose freely, and the loss of business on the part of small traders,” according to the draft.

The draft e-commerce constitution has been negotiated with various departments and government departments for more than a year. A spokesman for the Department of Industry and Internal Trade said he could not comment on the letter or meeting as he was not present. The government also wants to ensure that information from India belongs to local organizations first. Among the perceived protections is the control of the flow of data on the boundaries of Indian users and the audit.

“Violations of security rules will be taken seriously and will attract severe penalties,” according to the document.

Written by Saritha Rai.

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