Stating stiff laws against violation of foreign direct investment (FDI) by the e-commerce platforms such as Amazon and Flipkart, the government has now made compulsory for these companies to submit their annual compliance reports as per FDI norms, reported Inc42.
As per the sources, with the new rules in place, e-commerce companies with foreign investments have to submit a report, prepared by statutory auditors, by September 30 every year.
Adding on, the government has also eased an earlier certification rule which required these e-commerce companies to submit FDI reports to the Reserve Bank of India.
After the ecommerce policy came into effect, FDI-backed online marketplaces are now allowed to list products of third-party sellers on their platform, which means that they can’t hold any stock or sell their own goods directly to customers.
Moreover, the rules, which were effective from February 1, 2019, also prevented ecommerce marketplaces from having equity in any seller or entering into exclusive selling pacts with any vendor.
Notably, in response to new rules, Amazon and Flipkart were reported to be signing agreements with online sellers to fix a market operating price for each product.