Amazon and Flipkart say they've complied with the rules and deny any wrongdoing. Both companies, and the U.S. government, protested against the rules in January, saying they would force firms to change their business structures, Reuters has reported.
Goyal during the Monday meeting defended the government's new FDI policy, saying the rules should in no way be violated by any company, both in letter and in spirit. The government will not allow e-commerce firms' discounting practices to affect small shopkeepers, Goyal said, according to three industry executives in attendance.
"The minister was clear and direct," said one of the executives.
Flipkart CEO Kalyan Krishnamurthy in a statement said the company looked forward to working with the government and Goyal had engaged "in a candid, positive & progressive" discussion.
Amazon said it welcomed the "open & candid discussions & the promise of continuing engagement" with the government, adding it was committed to supporting various Indian government initiatives.
In a statement on Tuesday, the commerce ministry said it had formed a committee to hear grievances on issues related to FDI in e-commerce, adding it will ensure small retailers thrive in the country. It did not detail discussions around the question of steep online discounts.
E-COMMERCE, TRADE CONCERNS
The government brought in the new policy in February after complaints from small Indian traders who said the e-commerce giants used their control over inventory from affiliated vendors to create an unfair marketplace in which they offered major discounts. Such practices are now prohibited.
The rules led to a brief disruption of Amazon's online operations in February and shocked Walmart, which had just months before invested $16 billion in acquiring control of India's Flipkart in its biggest ever deal.
The United States government and American firms have voiced concerns about several recent Indian policies. Other than stricter e-commerce rules, India has demanded companies to store more of their data locally. In 2017, the United States lodged a written protest against India's decision to cap medical device prices.
Goyal has had a series of meetings since last week with foreign and Indian e-commerce firms and technology companies with an aim to iron out policy issues. He has also discussed what government press releases describe as "threats" local firms face from "large foreign competition".
On Monday, concerns around online discounts available on Amazon and Flipkart were discussed specifically during the meeting, with both companies asked by government officials about how they price products online, the sources said.
Amazon and Flipkart argued they provide logistics support and other services to small Indian retailers who use their e-commerce platforms to boost their businesses, said the third source who attended the meeting.
"Goyal said he doesn't want uncertainty for businesses ... he talked about having an inclusive policy that protects interests of all stakeholders," said one of the sources.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)