Amazon, Flipkart and India's Tata Group warned government officials on Saturday that these rules for online retailers would impact majorly on their business models.
According to anonymous sources, a meeting was organised by the consumer affairs ministry and the government's investment promotion arm where many executives expressed concerns and confusion over the proposed rules and asked that deadline for submitting comments be extended from July 6.
Amazon alleged that COVID-19 pandemic had already hit small businesses and the proposed rules will have a huge impact on its sellers, arguing that some clauses were already covered by existing law.
On a discussions with Reuters an executive at Tata Sons argued that these rules are problematic and cited an example to say it would stop Starbucks with which has a joint-venture with Tata in India.
A representative from Reliance told Reuters that the proposed rules would boost consumer confidence, but also added that some clauses need to be clarified, the company.
India's Commerce Minister Piyush Goyal told on Friday that the government will soon clarified some issues on certain foreign investment rules.
The rules were announced last month after the growing complaints from India's brick and mortar retailers that Amazon and Flipkart bypass foreign investment law using complex business structures.