DPIIT asks ED, RBI to probe CAIT’s plaint of violations by Amazon, Flipkart

The Department for Promotion of Investments and Internal Trade has written to the Enforcement Directorate and the RBI asking them to take necessary action on allegations of malpractices made by traders body Confederation of All India Traders (CAIT) against e-commerce companies Flipkart and Amazon.

CAIT, commenting on the development, said that the body would continue its fight against manipulations by e-commerce giants. It will observe 2021 as ` Bhartiya Vyapaar Samman Varsh’ , it said in a release.

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The DPIIT, in a letter dated December 22, asked the ED and the RBI to look at CAIT’s complaints alleging that Amazon and Flipkart had violated FEMA rules and FDI policy by adopting illegal structuring/investments and practices.

“The ED and the RBI are hereby requested to take necessary action,” the letter stated.

Flipkart maintained that it has not violated any law or regulation. "The Flipkart group is fully compliant with all applicable laws and FDI regulations in the country.....We're proud of our work that has helped keep businesses afloat in a challenging year, thereby contributing to economic growth and job creation in India," said the spokesperson for Flipkart answering a query put forth by BusinessLine.

In the past, CAIT has blamed Amazon and Flipkart several times for undertaking predatory pricing, deep discounting, loss funding, and exclusivity of various products, by violating FDI policy.

Both Amazon and Flipkart have been denying the charges of policy violations levelled against them.

The DPIIT forwarded four complaints of CAIT to the ED and the RBI, CAIT pointed out in its release. These include violation of FDI policy in deal between Flipkart and Aditya Birla Group, violation of FDI policy related to FDI in manufacturing which is being used for multi-brand retailing by various e-commerce companies and violation of FEMA and its rules by Amazon and violation of FEMA and FDI Policy and exploitation of loopholes by Amazon and Walmart.

Last month CAIT had written to Prime Minister Narendra Modi stating that big e-commerce companies with deep pockets were monopolising e-commerce business and retail trade in India by indulging in malpractices and violation of the FDI policy.

It added in the letter that the absence of concrete action against e-commerce companies had led to a roadblock for small businesses to run their operations online.

CAIT Secretary General Praveen Khandelwal said that efforts will be made by traders across the country to clean the e-commerce landscape of India. The idea is to end an era of manipulations, mal-practices and exploitation, the release said.  “CAIT will promote and encourage traders across the country to adopt digital commerce and digital payments as new instruments to widen business in India,” the release added.

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