As tensions rise between India and China, the former is trying to reduce the number of Chinese-made goods flowing across its border. Amazon's India business and Walmart's Flipkart are caught in the crossfire. The Ministry of Consumer Affairs is threatening punitive action against these online retailers should they fail to adequately explain why their sellers are not following a rule which states that a product's country of origin must be specified by the seller. The challenge comes on the heels of another, this one issued by the Competition Commission of India, which ordered an investigation into both Amazon and Flipkart following allegations of violations of India's competition laws.
Amazon has often faced regulatory challenges in India. Last year, the government enforced strict rules for foreign investment in e-commerce which forced the U.S. retail giant to rework its business structures and strained ties between New Delhi and Washington.