In a move that could act as a body blow to some of India’s biggest e-commerce companies, India’s Ministry of Home Affairs has withdrawn permission for e-retailers to deliver non-essential goods. This comes after ecommerce companies were earlier allowed to do all sorts of deliveries, including non-essential goods, in an April 15th order.
The move will have a significant impact on Walmart-backed Flipkart, Amazon India among other major ecommerce players in the country. For Flipkart, electronics and smartphones have been its top-selling categories. With all such deliveries now shut, business will be severely impacted. Media reports had earlier highlighted how all these companies were preparing their supply chain and logistics, in order to deal with an expected surge in shipment volumes. Those plans will now have to be shelved, at least till May 3rd.
Earlier, during the first phase of a proactive nationwide lockdown in India, the federal government had only allowed delivery of essential goods, including food, pharmaceuticals and medical equipment through e-commerce platforms.
That lockdown phase ended on April 14th, with an extension announced by Prime Minister Narendra Modi on the same day. However, in detailed guidelines released thereafter, the government issued guidelines allowing e-commerce companies to operate. Certain states had already started issuing standard operating procedures and operational protocols for ecommerce firms to operate.
India, as is known, is currently under a nationwide lockdown in a bid to control the spread of coronavirus. Till date, the lockdown has been largely effective in containing the spread, with close to 14,000 cases in a nation of 1.2 billion people. Experts and epidemiologists suggest, that the number could have been near a million cases, had the lockdown not happened. India has also ramped up testing, with over 35,000 tests being done in a day and overall testing figures nearing 400,000.
Economic activity however, has taken a catastrophic hit. The lockdown came at a time, when India’s $3 trillion+ economy had just started to get back on its foot after a prolonged economic slowdown in past 2 years. That recovery has now been completely halted with lockdown in place. The damage however is less severe when compared with other G 20 economies. The IMF and World Bank have both predicted a positive GDP growth rate for India despite lockdown, even though rest of the G 20 economies are being predicted to have GDP contraction.