NEW DELHI (Reuters) – India’s new foreign investment restrictions for its e-commerce sector, which includes giants such as Amazon.com Inc and Walmart-owned Flipkart, could reduce online sales by $46 billion by 2022, according to a draft analysis from global consultants PwC seen by Reuters.
Under the changes, e-commerce firms in India will from Feb. 1 not be able to sell products via companies in which they have an equity interest or push sellers to sell exclusively on their platforms.
December - Months - Election - May - Year
Announced in December, just months before a general election due by May this year, the rules were seen as an attempt by Prime Minister Narendra Modi’s government to appease millions of small traders and shopkeepers, who form a key voter base and say their businesses have been threatened by global online retailers.
Industry sources told Reuters the policy would delay or derail some investment plans and push companies such as Amazon and Flipkart to create new, more complex business structures.
Analysis - PwC - Estimates - Industry - Information
In a private analysis PwC conducted based on estimates provided by the industry and using publicly available information, it forecast that online retail sales growth, tax collections and job creation would be severely hit if companies changed their business models to comply with the new policy.
The draft analysis has not been made public. PwC India, in response to Reuters’ questions, said it “does not endorse any of these assumptions or conclusions, nor have we conducted any independent study on this”.
Matter - Policy - Company - Issues - PwC
“As a matter of policy, we do not comment on company specific issues,” PwC said.
The analysis produced by PwC showed that the gross-merchandise value of goods sold online could reduce by $800 million from expectations in the current fiscal year that ends in March, a document seen by Reuters showed. Then, the sales would dip drastically below previous forecasts, lopping off $45.2 billion in the next...
Wake Up To Breaking News!