The Indian government has sent warning letters to the Indian units of world-class e-commerce firm Amazon and Walmart-owned Flipkart, saying the two e-commerce firms are violating government regulations by failing to label goods sold on their platforms as country of origin.
Reuters reported on Saturday (Oct. 17) that the letter, sent by India’s consumer affairs ministry on Friday amid tensions between India and China, shows that the Indian government is stepping up enforcement of the regulation as part of an attempt to curtail imports of Chinese-made products.
The so-called country of origin of the products refers to the place where the goods are manufactured, regardless of where they are shipped.
The Department of Consumer Affairs gave the two retailers 15 days to explain why the goods sold on the sales platform did not indicate the country of origin, or else it would take action. But the letter does not say what action will be taken, only that there are legal actions with fines.
Representatives for both Amazon and Flipkart did not immediately respond to Reuters’ request for comment outside of normal business hours.
Relations between India and China have been tense since the bloody border clashes erupted in June. India has since blocked at least 177 mobile apps in China, and Chinese products destined for India have faced additional scrutiny and delays.
Amazon is also regularly challenged by regulations in India. Last year, the Indian government tightened restrictions on foreign investment in e-commerce and enforced strict rules, forcing the U.S. e-commerce giant to rework its business structure and straining relations between New Delhi and Washington.
In August, the All India Online Vendors Association, a group of more than 2,000 new sellers in India, filed an antitrust lawsuit against Amazon, accusing it of favoring some retailers by offering large discounts, including a $25,000 discount on its products. The sale of goods makes it difficult for independent third-party retailers to survive. It is believed that this lawsuit represents a new regulatory challenge for Amazon in India.
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