Amazon and Flipkart refute violating FDI norms; CAIT eyes CCI intervention

In separate meetings with Department for Promotion of Industry and Internal Trade (DPIIT) held on Friday, senior leadership from online retail giants Amazon and Flipkart refuted charges of flouting Foreign Direct Investment (FDI) norms and predatory pricing.

Both of the companies were summoned for the meeting by the department after a delegation of the Confederation of All India Traders (CAIT) met Commerce & Industry Minister Piyush Goyal and complained that e-commerce marketplaces are engaging in practices such as predatory pricing, deep discounting and not following the norms under FDI Policy.

Chaired by DPIIT's additional secretary Shailendra Singh, the meeting was attended by Amazon India’s Vice President Gopal Pillai and Flipkart’s COO Rajneesh Kumar who tried to explain the discount and seller promotional schemes available on their respective platforms.

Representatives of CAIT were present at the meetings as well. 

Commerce Minister Piyush Goyal was slated to present at the DPIIT meeting but had to leave for Thailand to attend the 9th RCEP Intersessional Ministerial meeting. The leadership at CAIT will be meeting the minister when he’s back in India to further discuss the matter.

Entrackr spoke to Sumit Aggarwal, CAIT’s senior executive who was present at the meeting. He said that both Flipkart and Amazon failed to provide specific responses to trader body’s charges of deep discounting, predatory pricing and marketplaces having control over the inventory.

“We have provided ample evidence regarding the allegations we have made, there are clear violations of the policy,'' added Aggarwal

The trader body had also filed a petition with Rajasthan High Court against Both Amazon and Flipkart alleging FDI policy violations. The Jodhpur bench of the high court had also issued notices to both the marketplaces, central government and the Enforcement Directorate.

While High Court had asked the union government, ED and both companies to submit their reply on the petition of CAIT before the next hearing on Oct 15, the trader's body is in a process to seek Competition Commission of India’s(CCI) intervention for appropriate action against FDI violations.