FDI startups

Piyush Goyal promises action against e-comm firms violating FDI norms: Will govt walk the talk?

FDI startups

E-commerce majors Amazon-Flipkart and sellers bodies such as Confederation of All India Traders (CAIT) and All India Mobile Retail Association (AIMRA) have been up in arms for past 12-18 months over violation of FDI norms and Press Note 2.

Since the festive is around the corner and Amazon and Flipkart are back with their flagship sales, sellers representing bodies have been exercising every option including legal, regulatory and a series of protests across the country to stop the duo from dictating price, striking exclusive deals and deep discounting.

Buckling under the pressure from CAIT and others, Commerce Minister Piyush Goyal asked DPIIT to look after the concerns of sellers last week. Now, he assured the stringent actions against companies who violate the policy in multi-brand retail and Press Note 2.

Answering a question during a press conference, Goyal revealed that the Commerce Ministry had already sent a detailed questionnaire to Flipkart and Amazon a couple of days ago. “We will send supplementary questions to understand whether they are violating regulations or not. We will take stringent actions against offenders,” he added.

Goyal also made it clear that no e-commerce marketplace can illegally leverage multi-brand policy for the growth of the electronic marketplace.

Sellers and traders bodies, including CAIT, have been complaining against continuous violations of regulations by Flipkart and Amazon. CAIT even requested to audit and ban on festive sales organised by the duo. It also filed a petition in Jodhpur bench of Rajasthan High Court.

Responding to CAIT allegations, Flipkart and Amazon had denied any such claims.

The bench transferred case to the Union government and asked for a reply within a fortnight. It will hear the case on November 11.

This assurance from the government must have relieved retailers who have been protesting against alleged violation of FDI norms and Press Note 2. However, this is not the first time Goyal or Commerce ministry has said so. Violation about Press Note 2 has been consistently raised by sellers representing bodies for a long time.

Nevertheless, the government didn’t bother to investigate retailers and their association’s claims seriously. It would be interesting to see how the government resolves the genuine concerns of CAIT and other bodies. Will the government show the will to protect the interest of retailers or things settle down after festive air gets cleared?

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