How India Just Disrupted Amazon’s E-Commerce Stranglehold

The nation's new rule prohibits companies from both owning and selling on an online marketplace.

amazon robot
An Amazon robot put dozens of employees in the hospital on Wednesday. (David Ryder/Getty Images)
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Amazon’s website in India pulled down thousands of products this past Friday, the result of a new e-commerce rule in that country that could have far-reaching implications around the globe.

The new regulations stipulate that a company cannot both own an online marketplace and directly sell its own products on it or through subsidiaries in which it has a stake. Until Friday, Amazon had used the latter workaround to skirt an earlier Indian rule aimed at protecting local e-commerce sites and helping them compete with global tech giants. In December, however, India unexpectedly closed this loophole and the new, stricter rules officially went in effect on Friday. Amazon has already warned that the new restrictions could hamper its revenue in India in the first quarter of 2019.

“Analysts said the new rules could affect as much as 40% of Amazon’s sales in India and around a third of the revenue at Flipkart, the homegrown online retail leader now controlled by Walmart,” the Journal wrote. Both of those companies have made heavy investments in the India online market, where research firm eMarketer estimates sales could grow to between $72 billion in 2022 from around $33 billion in 2018.

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