Commerce Minister asks DPIIT to summon Amazon and Flipkart on alleged FDI abuse

The Department for Promotion of Industry and Internal Trade (DPIIT) has been asked to summon Amazon and Flipkart on an alleged violation of foreign direct investment (FDI) policy, which came into force this February.

The e-commerce marketplaces are said to be practising predatory pricing, deep discounting, loss funding and exclusivity of various products which is not allowed under FDI Policy, according to Confederation of All India Traders (CAIT) delegation who met Commerce & Industry Minister Piyush Goyal.

Goyal assured the CAIT delegation that the govt will not allow predatory pricing or deep discounting under any circumstances.

The Commerce Minster asked DPIIT to call Amazon and Flipkart tomorrow to clarify the points raised by CAIT. He also instructed them to have meetings with CAIT and sort out the issues.

The delegation further said that e-comm firms are influencing the prices and creating an uneven level playing field under the government nose.

These companies are snatching the business of offline traders by unethical business practices, said CAIT in an after-meeting release.

As per the delegation, Goyal has said that any re-routing of business in e-commerce will not be allowed. E-commerce firms will have to work only as a marketplace as spelt out in FDI policy, he added.

The offline retailers demanded business audit in e-commerce firms to check the authenticity of the platforms and its sellers. It proposed to stop COD payment option and imposition of an immediate ban on online commerce portal flouting FDI rules.

It also suggested the constitution of an Ombudsman to look into the grievances of the consumers.

Leading the delegation of CAIT Praveen Khandelwal raised questioned of practices exercised by e-commerce firms.

How can the e-comm marketplace offer any “SALE” since they are not the owners of the inventory? How can e-commerce companies sell the same brand and quality of goods much cheaper than brick and mortar shops? asked Khandelwal.

He further raised questions on manufacturing companies adopting different price mechanism for online portals and also urged to find those responsible agents behind the curtain acting as influencers and corporate investors.

The CAIT delegation comprised All India Mobile Retailers Association (AIMRA) and All India Consumer Products Distributors Federation (AICPDF).