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Indian e-tailers might soon begin operations despite the lockdown

While India has extended the nationwide lockdown till May 3, it is allowing industries to resume operations in a phased manner.

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After operating on zero revenue for almost a month due to the lockdown, e-commerce companies might be allowed to resume their operations as the revised guidelines issued by India’s home ministry on Wednesday said online operations can function during the lockdown beginning April 20.

On April 14, India extended the nationwide lockdown till May 3, however, a day later, the ministry came up with the list of services that would be allowed to function during the period. The guidelines permits e-commerce companies, courier services, cold storage and warehousing services, and services provided by self-employed persons like electricians, IT, repairs, plumbers, motor mechanics, and carpenters to work.

Until now, e-commerce operations of only essential products were allowed that included medicine, grocery, and food delivery. However, the current guidelines don’t specify what all would be allowed under the relaxed norms for non-essential products.

American e-commerce firm Amazon has reportedly sought clarification from the Indian government on whether they can sell non-essential items, so as to avoid getting in trouble by jumping on the conclusion. The Seattle-headquartered company has had its fair share of troubles navigating Indian legal waters, where regulations are often abstract and unclear.

Other e-tailers, primarily homegrown companies such as Flipkart, Snapdeal, and Paytm Mall have already stepped on the gas and are preparing to be fully functional from April 20.

Citing ministry sources, a report by local media Economic Times (ET) said the new regulations allow e-commerce firms to resume full operations. “For now it is amply clear that these companies can resume services if there are problems faced at the local level they can be handled later,” a government official told ET.

Another industry source who was present on the call between e-commerce companies, government officials from Niti Aayog and the ministry of home affairs on Wednesday said they were allowed to restart all e-commerce activities, the report said.

Further, the report said, e-commerce operations will be allowed in all the areas except containment-zones, where the number of cases is pretty big.

“We welcome MHA’s (Ministry of Home Affair) updated guidelines for the e-commerce sector. At this critical juncture, the e-commerce industry can ensure that citizens stay indoors and all their needs are met through home deliveries with immense precautions. We look forward to serving the nation in protecting both lives and livelihoods,” a Snapdeal spokesperson told KrASIA.

“In line with the guidelines announced by the central government and also in collaboration with all states and local authorities, we will continue to serve consumers,” a Flipkart spokesperson said.

Amazon, however, according to the ET report, said the relaxation to e-commerce companies is a welcome move by the government, and that it’s seeking additional clarifications about Wednesday’s announcement.

“The resumption of economic activity from April 20 is a welcome step that would nonetheless depend on unhindered availability of labor that is critical to deliver essential products to people across the country and ensure they can stay home safely,” an Amazon India spokesperson said.

Even though, e-commerce companies would be allowed to function from April 20, it’s yet to be seen how it will affect India’s attempt at slowing down the COVID-19 infection. Yesterday, an employee of a restaurant in Delhi tested positive for the novel coronavirus, which has put 72 families—where food was delivered—on self-quarantine.

According to the industry estimates, non-essential items such as consumer electronics and appliances and fashion, apparel, and accessories, make up for over over 90% of the e-tailers’ revenue. After the e-commerce services were suspended in the last week of March, e-tailers had turned to tap rapidly growing demand for grocery delivery to keep themselves afloat. With the relaxed norms, online companies can now capture the pent-up demand in the market that may offset their recent business loss.

However, offline retailer associations are interpreting these regulations differently as the revised guidelines mentioned supply of essential goods is allowed–whether involved in manufacturing, wholesale, and retail.

“Let it be very clear to all E-commerce Companies in India and to all those who have somehow misinterpreted or misunderstood the #MHA guidelines,” Sumit Agarwal, National Secretary at retail lobby body, Confederation of All India Traders said in a tweet. “Delivery of only & only essential goods has been permitted even after 20th April. There is absolutely no confusion whatsoever!”

Meanwhile, sellers of e-commerce platforms are reportedly seeking clarity on the guideline to avoid trouble with the local authorities.

“The issue of Ecom of non-essential needs to be clarified and all grey areas need to be removed so that there are no problems to sellers at the local level,” said All India Online Vendors Association, another trader lobby, in a tweet.”

Along with the e-commerce companies, the Indian government has also offered some relaxation for manufacturers of IT hardware, packaging material, and essential goods including drugs, pharmaceuticals, and medical devices, allowing them to resume operations in a phased manner.