The sudden tightening of FDI norms in e-commerce has left foreign investor-backed e-tailers shocked, consumers worried and domestic retailers ecstatic.

The move has rattled top global retailers such as Walmart and Amazon, who have made significant investments in the country, as they grapple with the abrupt policy change. And, jobs in the sector could also be at risk.

"On one hand, you are asking for investments and on the other, these policy changes are announced overnight without a basic consultation. This is detrimental to the concept of ease of doing business," said a senior executive at Amazon India.

Despite being in middle of holiday season, top Amazon executives in Seattle were alerted of the new circular from the government on Wednesday evening, sources said. Amazon did not respond to specific queries sent by TOI.

For consumers it's a bolt from the blue and if the policy is strictly followed it could mean an end of the road for discounts, lucrative cash backs and a large array of goods available on the digital marketplace.

"There are several brands which you get only on online marketplaces and not anywhere else," said Medha Kumar, a 32-year-old entrepreneur from the Capital. "I would patiently wait for the big sales by these online companies to stock up on apparel for entire seasons. The money I could save was a lot. I hope the discounts don't disappear."

But, the domestic players sounded upbeat after the government seemed to have reacted to their complaints against foreign majors.

"The recent move of the government to tighten the noose around major e commerce players will culminate into a fair market competition and will provide level-playing field for one and all to adopt e-commerce as another business model," said a spokesperson for Confederation of All India Traders (CAIT). "Both online and offline traders in the country will now be able to sell their goods on online platforms in a transparent manner."

Large domestic retailers, too, said the clarifications in the policy will not allow foreign retailers to build brands, as they will have no option but stick to linking to buyers and sellers through their online platforms.

When asked about changes in the policy, a Flipkart Group spokesperson said the e-commerce ecosystem has created innovations in MSME manufacturing, supply chain, warehousing, packaging and digital payments and has created thousands of jobs.

“Government’s policy changes will have long-term implications for evolution of the promising sector and whole ecosystem. It is important that a broad market-driven framework through right consultative process be put in place in order to drive the industry forward. This is just a start, the industry is set to be a major growth driver for the Indian economy and create millions of jobs in the future,” the spokesperson added.

With Amazon investing $5 billion in India and Walmart spending around $16 billion to acquire 77% stake in Flipkart, an intense long-drawn war was being expected between these two retail majors, which could have spelled good news for consumers in the form of discounts and a bigger assortment of brands and products on their platforms.

Industry experts, however, sought to calm jittery consumers and retailers, saying the push for a level-playing field by the government should not be a cause for worry.