Amazon pulls products from its India website

E-commerce rules that went into effect in India on Friday caused widespread disruption for Amazon.com. Amazon has been forced to remove an array of products from its website in India to comply with new regulations.

Items include Echo speakers, batteries and floor cleaners.

The regulations are expected to have a far-reaching impact on India's e-commerce sector, which has drawn billions in foreign investment.

Amazon and Flipkart lobbied against the laws which aim to protect small businesses.

The changes to foreign direct investment rules, which come into force 1 February, also stop online retailers from making deals to sell exclusively on their platforms.

By Thursday, numerous items sold by vendors such as Cloudtail, in which Amazon holds an indirect equity stake, were no longer available on the Amazon India site.

Prime Minister Narendra Modi's administration is seen as keen to appease small traders in the run-up to a general election due by May.

Many small traders say the e-commerce giants use their buying power and control over inventory from affiliated vendors to create an unfair marketplace where they can offer deep discounts on some products. Such arrangements will be barred under the new policy.

Industry sources have said the new rules will force the big e-sellers to change their business structures and will raise compliance costs.

Brian Olsavsky, Amazon's chief financial officer, said on a call with reporters, the "situation in India is a bit fluid right now."

Nevertheless, he said the country "remains a good long-term opportunity" for Amazon.

It is unclear how long the disruption will last. Would-be buyers of Echo speakers on Amazon India saw a message reading: "We don't know when or if this item will be back in stock."

The impact of the changes on Flipkart was not clear. It did not immediately respond to a request for comment.

In a letter to India's industries department in January, Chief Executive Kalyan Krishnamurthy said the rules required Flipkart to assess "all elements" of its business operations and risked causing "significant customer disruption".