Policy

CAIT asks government to check ‘malpractices’ of foreign e-commerce companies

Our Bureau New Delhi | Updated on May 17, 2021

Several actions of various e-commerce companies are absolutely contrary to the provisions of the FDI policy, it claims

The Confederation of All India Traders (CAIT) has asked the government to immediately issue new rules related to Foreign Direct Investment (FDI) for e-commerce to check “malpractices” of foreign funded entities.

CAIT, has written to the Commerce & Industry Minister Piyush Goyal, to issue immediately a new Press Note replacing Press Note No.2 of FDI Policy, 2018, to protect domestic traders from the alleged malpractices of foreign funded e-commerce entities Amazon and Flipkart, according to a press statement circulated by the traders’ body.

Also read: Small traders, retailers protest against foreign e-commerce platforms at Asmbhav Summit

Despite various solemn declarations made by the Minister on various public platforms stating that no one will be allowed to violate the policy and the law, these foreign funded companies are continuing to flout FDI policy and the law for the last three years and no action has been taken against them, the note charged.

It accused in the release, “Several actions of various e-commerce companies are absolutely contrary to the provisions of FDI policy and the cases where no investigation is required, even then no action has been taken so far against them.” .

Also read: Avoid frequent tweaks to e-comm FDI policy, industry tells govt

The most rampant and subsisting violation by Amazon and Flipkart, CAIT claimed, has been the creation of a complex web of affiliated entities, by way of equity control or economic participation which has allowed both entities to engage in capital dumping, it alleged.

Preferential treatment to a ‘few preferred sellers’, predatory pricing, deep discounting, controlling inventory and making e-commerce an area of uneven level playing field are some of the tools of violations which have been brought to the notice of the government several times, it added.

Published on May 17, 2021

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