The changes made in the e-commerce policy on Wednesday seek to create a level playing field in online retail by placing curbs on discounts and barring marketplaces such as Amazon and Flipkart to sell products of affiliated companies — which should appease small businesses who are the ruling BJP’s core constituency.

However, analysts said the problem with the guidelines is that there are yet no rules to enforce them, and the big players could simply restructure their business models to circumvent the norms.

Small traders have been feeling marginalised ever since demonetisation and the GST hit them badly. Analysts said their indifference towards the BJP was a factor behind the party’s poor showing in the state elections in Rajasthan, Chhattisgarh and Madhya Pradesh.

Price competition from the bigger e-commerce players was also hitting the traders’ bottomline and they had been agitating against FDI in online retail.

US retailer Walmart-owned Flipkart on Thursday said the government should follow a consultative process in framing rules that have long-term implications, and any changes should be for driving the industry forward.

“Government policy changes will have long-term implications for the evolution of the promising sector and whole ecosystem. It is important that a broad market-driven framework through right consultative process be put in place in order to drive the industry forward,” Flipkart said in a statement.

Flipkart and the US-based Amazon — the two largest players in the burgeoning Indian e-commerce sector — are expected to be hit the hardest once the new norms come into effect from February 2019.

Amazon has said it is evaluating the circular.

Traders body CAIT said if the steps announced are implemented in proper spirit, malpractices and predatory pricing policy and deep discounting of e-commerce players will be a matter of past.

“The move to tighten the noose on major e-commerce players will culminate into a fair market competition and will provide equal even level playing field for one and all to adopt e-commerce as another business modal.

“Both online and offline traders in the country will now be able to sell their goods on e-commerce platforms in a transparent manner,” Praveen Khandelwal, secretary-general of the Confederation of All India Traders (CAIT), said.

Indian e-commerce platforms seemed happier with the guideline compared

with the multinationals. Snapdeal lauded the move, with founder and CEO Kunal Bahl saying these changes will enable “a level-playing field” for all sellers, helping them to leverage the reach of e-commerce.

“It is an acknowledgement that all the major foreign players have been consistently violating the spirit of the policy from day one. Almost all the clarification points mentioned in this policy can be directly attributed to an active violation by these foreign players… it will finally close the back door that has been blatantly exploited by these players,” ShopClues CEO and co-founder Sanjay Sethi said.

The guidelines also state the inventory of a vendor will be deemed to be controlled by an e-commerce marketplace entity if more than 25 per cent of the vendor’s purchases are made through the marketplace or its group entities. Any outright equity investment in the vendor will also bar the entity from selling in the marketplace.

Rajiv Chugh, national leader, policy advisory & speciality services, EY India, said, “E-commerce players need to relook there operating strategy. The suppliers will not be permitted to sell their products on the platform run by such marketplace entity. This will impact back-end related wholesale group entities and need to remove them from the e-commerce value chain.”