India may restrict e-commerce websites from selling private labels

The e-commerce companies may be restricted from selling the private labels produced by companies where they have "significant interest" or which are related parties under the new e-commerce rules, The Times of India (TOI) reported on Friday.

The rules and the new policy have been finalised and are expected to be announced soon, the report added.

The move is expected to have a significant impact on companies like Amazon, Flipkart, Reliance and Tata, which have a large number of private labels. More harm is likely to be on Amazon and Flipkart, which have used their private labels to make deep inroads in the Indian market.

The Centre will also seek fairness in algorithms to enable the ranking of sellers and service providers.

Under the new rules, the Centre will also seek "fairness in treatment and accessibility of logistics service providers, payment gateways and other services". Companies like Amazon will have to do away with prompts to push Amazon Pay.

Moreover, all entities will also have to provide a choice of logistics service providers to the buyer. Also, there might be a "fallback liability" on the sellers. The sole responsibility of the order might be put on the seller and not the marketplace.

A source quoted in the report said that when the consignments are checked at the time of pick-up from the seller, and the seller also does KYC and other checks, the liability may not be on the marketplace.

The rules are also expected to protect consumers from fake and deceptive reviews. They will also aim to strengthen consumer grievance redressal rules.