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Amazon Rethinks Policy for Flag Merchandise After Censure from India

March 30, 2017, 1:13 PM UTC
US founder and CEO of Jeff Bezos poses on a lorry after handing over a two billion dollar cheque to Indian Vice President and Country Manager of, Amit Agarwal (unseen) in Bangalore on September 28, 2014. The investment will go towards raising the bar for online shopping in India. AFP PHOTO/Manjunath KIRAN (Photo credit should read Manjunath Kiran/AFP/Getty Images)
Photograph by Manjunath Kiran — AFP/Getty Images

India’s reaction to an website selling doormats resembling the country’s flag involved an unprecedented public and private offensive against the U.S. company by Prime Minister Narendra Modi’s government, a document shows.

Foreign minister Sushma Swaraj publicly threatened in January to rescind visas of Amazon employees if the doormats were not removed from its Canadian website.

But a document seen by Reuters shows the government went even further in private, asking its U.S. and Canadian embassies to raise the matter “strongly” with Amazon’s senior leadership.

India also escalated the matter to Amazon CEO Jeff Bezos and prompted a global audit by the company to “ensure that such products are not listed on any of its other” websites around the world, according to the document.

Amazon (AMZN), which removed the products within 24 hours and apologized to the government, declined to comment.

Much is at stake for Amazon in India, where it plans to invest more than $5 billion as it takes on home-grown Flipkart and Snapdeal for a bigger share of the Internet services market in the world’s fastest growing major economy.

Amazon has now made Indian laws that govern the use of the national flag and other emblems “an integral part of the global compliance process,” the document said, outlining the steps Amazon and India have taken since the incident.

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India’s reaction underscores the risks governments run by nationalist leaders are posing for businesses around the world. U.S. President Donald Trump, for example, has also taken an aggressive stance on Twitter against individual companies.

Last year, Modi presented a global leadership award to Bezos at a U.S.-India Business Council summit in Washington.

Amazon told the government that it had strengthened its in-house compliance units that monitor products sold by third-party vendors on its websites, the document said.

“Amazon India has conveyed that it is fully committed to respecting Indian laws and customs,” the document said.