SMBs Say India’s eCommerce Curb Too Late

Indian Prime Minister Narendra Modi is feeling pressure as many small retailers and traders — a key bloc for his reelection hopes — view his recent curbs on eCommerce as not doing enough for them, according to a report by Reuters.

Under new rules imposed by the Indian government, eCommerce companies like Walmart-owned Flipkart Group and Amazon, will no longer be able to sell merchandise from companies in which they have an equity interest, or form exclusive agreements with sellers.

Millions of shopkeepers in India, and those who work with them closely, lobbied the PM for the new rules, especially after Walmart acquired Flipkart for $16 million.

That group, comprising of about 25 million small business owners, mostly supported Modi in 2014. However, they feel Modi has done too much damage after he didn’t fulfill promises not to let foreign companies into the domestic sector.

Pankaj Revri, president of a furniture market association in central Delhi, said Modi’s actions were unconscionable.

“We clapped and voted for Modi believing in his promises,” Revri said. “But what have we got is just a slap on our face.”

Some groups think Modi’s political organization, the Bharatiya Janata Party, is panicking after losing five state elections this month. Also, the government has to hold a general election at least by May.

In a recent poll by a TV channel ABP News, the station predicted that it was possible Modi could come up short in the election if a viable opposition party forms.

The main point of contention is that some business owners have seen drastic reductions in earnings — by almost half, in fact — as they struggle to compete with big American companies.

Amazon India, in a statement, said it functioned “in compliance with the laws of the land” and that an estimated 400,000 businesses are on the marketplace.