New draft policy aims to level ecommerce playing field; Byju’s lenders eye loan amendment proposal

Kevin Colleran

1 year ago

The government will soon release a draft policy for the ecommerce sector, disallowing marketplaces from selling brands in which they hold equity, or any private labels, to ensure a level playing field for smaller entities in the space. This and more in today’s ETtech Morning Dispatch.

Also in the letter:
■ Jack Dorsey angers government with threat accusation
■ ETtech Done Deals
■ Accenture to invest $3 billion in AI

New draft policy promises to level ecommerce playing field

To ensure a fair market for small traders and businessmen and to keep big players from taking unfair advantage of their size, the government will soon release a new draft policy for the ecommerce sector.

What’s the policy? The policy will be applicable to both an Amazon and an Indian marketplace. A consumer affairs department official told ET that the new policy will bring parity between foreign and Indian marketplaces, and no such entity will be allowed to hold any equity in sellers, nor sell their private labels, on their platform.

The new policy will also ensure that catalogues and search results are displayed in a fair and transparent manner to consumers, the official added.

Background: Small retailers and traders have accused e-commerce majors of flouting FDI norms and indulging in predatory pricing, giving preferential treatment to a clutch of sellers in which they hold stake.

As of now, India allows 100% foreign direct investment (FDI) in ecommerce marketplaces, where the companies act as a technology platform connecting buyers and sellers. However, no FDI is permitted in the inventory-based model, where platforms can sell directly to consumers, but cannot have third-party vendors.

Government scrutiny: Taking into account complaints of smaller players, the government is also framing rules for the sector under the Consumer Protection Act.

Byju’s lenders eye loan amendment proposal for disputed TLB

As the battle between edtech startup Byju’s and lenders over its $1.2 billion term loan B (TLB) intensifies, the creditors are clear that they want the company to send a draft loan amendment proposal, even as the scheduled call between both parties on Monday was cancelled, people familiar with the matter told ET.

Details: While the lenders remain open to negotiations, the group has rejected the Indian edtech’s proposal for one-on-one meetings, the people quoted above added. The lender group signed a cooperation agreement earlier that requires them to act together in negotiations, a source said. Bloomberg reported the development first on Tuesday evening.

Timeline: Byju’s $1.2 billion loan case

Catch up quick: Last week, Byju’s said the lenders’ demands were “high-handed” while filing its suit in the New York Supreme Court against American investment management firm Redwood and its entities over the TLB.

Byju’s missed its quarterly interest payment of about $40 million on the TLB, which was due by June 5, even as it sought to “disqualify” lender Redwood, which has allegedly resorted to “predatory tactics”, and consistently increased its exposure to the loan by acquiring a sizable stake in the TLB with “the intent of making windfall gains”.

Lenders’ response: The group of lenders, who claim to collectively own more than 85% of a $1.2 billion term loan taken by Byju’s, said the suit filed against their demand for an “accelerated” repayment was “meritless”.

No go: Delhi government to impound bike taxis

Following Monday’s Supreme Court (SC) order setting aside the High Court verdict that allowed Rapido, Uber, and Ola to operate bike taxis in the national capital, the Delhi government has warned that it will soon start impounding two-wheeler taxis running on its roads.

Ride to live: The Delhi government’s principal secretary of transport, Ashish Kundra, said that notices will soon be sent to aggregators directing them to comply with the SC ruling. The ban, once implemented, will pull thousands of bike taxis off Delhi’s roads, hitting budget commuters. According to cab aggregator industry estimates, up to 80,000 people use bike taxis every month across platforms.

Quick recap: In a public notice issued earlier this year, the state government had cautioned bike taxis against plying in Delhi and warned that violations would make aggregators liable for a fine of up to Rs 1 lakh. This was challenged by Rapido and Uber in the Delhi High Court, which told the authorities to not take any coercive action against the operators in the absence of a policy. The Supreme Court set aside this ruling.

Immediate impact: An executive at an aggregator firm said that bike taxis are mostly used for last-mile connectivity, and the ban could impact commuters booking rides from transport hubs like metro stations.

Karnataka to join in: Karnataka is preparing to approach the High Court with a plea to vacate its stay which has restrained its transport authorities from acting against app-based bike hailing services in Bengaluru. The case is expected to come up before next week.

Jack Dorsey says India threatened to shutter Twitter; outright lie, says govt

After a period of calm, the Twitter vs government brawl was reignited when the microblogging site’s co-founder and ex-boss Jack Dorsey stated that the Indian government had threatened to shutter Twitter if the platform didn’t take down certain accounts.

Dorsey stated on a YouTube show that the Indian government had threatened to shut down Twitter in 2021 and raid its employees if the platform failed to comply with diktats to block certain accounts.

Driving the news: Speaking on the YouTube news show Breaking Points late Monday night, Dorsey said Twitter was threatened with closure in India unless it complied with orders to block the accounts of journalists and protesters during the 2021 farmers’ agitation.

“It manifested in ways such as: ‘We will shut Twitter down in India’, which is a very large market for us; ‘we will raid the homes of your employees’, which they did; ‘we will shut down your offices if you don’t follow suit’. And this is India, a democratic country’’, he said.

Government response: Chandrasekhar said Dorsey’s comments were an outright lie and that no Twitter employees were sent to jail nor was the platform shut down.

“This is an outright lie by Jack – perhaps an attempt to brush out that very dubious period of Twitter’s history. Facts and truth – Twitter under Dorsey and his team were in repeated and continuous violations of India law. As a matter of fact, they were in non-compliance with law repeatedly from 2020 to 2022, and it was only in June 2022 when they finally complied,” the minister tweeted on Tuesday morning.

History of bad blood: Twitter and the Indian government had several rounds of legal and verbal spats between January and February 2021, after the platform refused to take down some of the content flagged by the IT ministry. That stance somewhat changed after Elon Musk took over the company in 2022, and said that he would rather comply with local laws than risk jail time for his employees.

ETtech Done Deals

Siddharth Ladsariya, cofounder, Everest Fleet

Uber ploughs $20 million in Mumbai-based Everest Fleet: Ride-hailing company Uber has led a $20 million funding round in Mumbai-based car rental company Everest Fleet. This is Uber’s first inorganic investment in India and comes in the backdrop of the US-based company’s expansion into electric vehicles (EV), for which it has partnered with several fleet operators, including Everest.

Alok Mittal, cofounder and CEO, Indifi

MSME lender Indifi Technologies raises $35 million: The company will use the fresh capital to expand its current operations, enhance presence across existing and additional markets, and develop new products for the MSME sector. The current round comes at a time when several players are moving towards co-lending and loan origination agreements to build their books.

ET Ecommerce Index

We’ve launched three indices – ET Ecommerce, ET Ecommerce Profitable, and ET Ecommerce Non-Profitable – to track the performance of recently listed tech firms. Here’s how they’ve fared so far.

Accenture to invest $3 billion in Artificial Intelligence, double AI talent to 80,000

Accenture on Tuesday said it will invest $3 billion in its data & AI practice over the next three years, and double the AI headcount to 80,000 through hiring, acquisitions, and training.

Details: Accenture said it will invest in new and existing relationships across cloud, data, and AI. The company said it is currently working on generative AI projects, such as helping a hotel group manage customer queries, and a judicial system that analyses procedural information across hundreds of thousands of complex documents.

New launches: The company launched its AI Navigator for Enterprise platform “that will help clients define business cases, make decisions, navigate AI journeys, choose architectures, and understand algorithms and models to drive value”. It also announced the Center for Advanced AI “to help maximise the value of generative and other AI”.

Quote, unquote: Accenture CEO Julie Sweet said, “there is unprecedented interest in all areas of AI, and the substantial investment we are making in our data & AI practice will help clients move from interest to action to value in a responsible way, with clear business cases”.