India protects its economy from e commerce giants

It appeared that the future of Indian e commerce was focused on competition between two US operators, Amazon and Walmart. In May 2018 Amazon bought the Indian company which had the strongest roots on the market. This target company was Flipkart, and its purchase price was 16 billion dollars. In September, Walmart invested more than 5 billion dollars to buy More, one of India’s main supermarket chains.

With 4 600 shops and more than 2 million employees, Walmart is a distribution giant in the United States. It has gradually adapted to the Web by using its shops as places of delivery and is now expanding throughout Asia. In only a few years, Amazon established itself as the Western leader of e commerce and has now started manufacturing as well.

However, the Modi government has drafted a new regulation: foreign operators will no longer be authorized to sell their goods and services. They will have to behave as neutral intermediaries, treating all manufacturers equally and not intervene on the price. Furthermore, as the manufacturer is the only person responsible for what is sold, intermediaries operating on the Web will have to indicate the manufacturer’s name and contact details. Therefore, it will be possible to bypass intermediaries and make direct contact with the manufacturers.

Despite interventions by the US Government, the regulation will enter into force on 1 February 2019. This will bring the greatest satisfaction to militant Hindus and communists who led the campaign against the US transnationals. At the same time, it should avoid pressure to lower purchase prices and enable networks of Indian retailers to be saved.

In contrast, Europe imposes no limits on the profits that Web giants can exploit. The debate turns solely on the way of imposing them and not on the jobs that they destroy nor on the transformation of the society that they induisent.