India is examining the feasibility of setting up a regulatory authority to settle disputes related to e-commerce, a top government official said, amid a raging battle between big online retailers and mom-and-pop stores.

The proposal being considered comes after small traders approached the government with allegations of predatory pricing and deep discounting by Amazon.com Inc. and Walmart Inc (which owns Flipkart). They allege that the U.S. giants are pricing them out of the market.

“We are examining the need for a regulator to look into e-commerce issues once the policy is implemented,” Guruprasad Mohapatra, secretary of the Department for Promotion of Industry and Internal Trade, told Bloomberg News in an interview in New Delhi. “We plan to implement the policy within this financial year.”

Prime Minister Narendra Modi’s administration is under pressure from small traders, a traditional support base for the ruling Bharatiya Janata Party, to act against the big online retailers. In their defence, online retailers say e-commerce has the potential to create millions of jobs in India and give opportunities to smaller businesses.

Data Protection, Privacy

The policy will also address with the use of data generated by the retailers and its storage on servers in India, Mohapatra said.

The new policy is in the works for over a year now and has become a contentious issue in trade talks between the U.S. and India. In the past too, online retailers have been on the receiving end when the South Asian nation implemented new rules that prohibited exclusive product offerings and deep discounts on them.

U.S. secretary of commerce Wilbur Ross, during his visit early last month, said India needed to balance the interests of small retailers and companies operating in the sector.

The Confederation of All India Traders, a supporter of the ruling party, has been seeking tough laws for e-commerce operators in the country in the new policy. It has been spearheading the move for a regulator and is canvassing for heavy penalties for violations.