Uncertainties in interpreting laws in India: Amazon

Written by PTI | New York | Updated: Oct 30 2014, 22:48pm hrs
AmazonGlobal e-Commerce giant Amazon has said it sees "substantial uncertainties" in interpretation of Indian laws (Reuters)
Global e-Commerce giant Amazon has said it sees "substantial uncertainties" in interpretation of Indian laws, which could impact its business in the one of the world's fastest-growing multi billion dollar online shopping market.

The US-based firm also expressed similar views regarding rules and regulations in China.

"There are substantial uncertainties regarding the interpretation of People's Republic of China (PRC) and Indian laws and regulations, and it is possible that the government will ultimately take a view contrary to ours," Amazon said in a regulatory filing to the US Securities and Exchange Commission (SEC).

The firm further said: "In addition, our Chinese and Indian businesses and operations may be unable to continue to operate if we or our affiliates are unable to access sufficient funding or in China enforce contractual relationships with respect to management and control of such businesses."

Amazon added if its international activities were found to be in violation of any existing or future PRC, Indian or other laws or regulations, its businesses in those countries could be subject to fines and other financial penalties, have licenses revoked, or be forced to shut down entirely.

In India, the government restricts ownership or control of Indian companies by foreign entities involved in online multi-brand retail trading activities, it said.

Amazon, like its domestic rivals Flipkart and Snapdeal, operates under a marketplace model, where it offers its platform to sellers across the country.

"For www.amazon.in, we provide certain marketing tools and logistics services to third party sellers to enable them to sell online and deliver to customers. Although we believe these structures and activities comply with existing laws, they involve unique risks," Amazon added.

The disclosure comes amidst reports of Amazon facing tax issues with local authorities in Karnataka.

In July this year, Amazon has said it will invest USD 2 billion (over Rs 12,000 crore) in India to expand business, after its largest Indian rival Flipkart announced USD 1 billion in funding.

Amazon, which launched its marketplace in India last year, said the country is one of its fastest growing markets and is on track to touch USD 1 billion in gross sales.