comscore Flipkart and Amazon India festive sales violate FDI norms, says CAIT
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Flipkart and Amazon India festive sales violate FDI norms and must be banned: CAIT

Flipkart and Amazon India have announced their festive season sale will begin on September 29. However, CAIT believes that these sales violate the FDI norms allowed in the e-commerce marketplace.

  • Published: September 18, 2019 10:32 AM IST
E-commerce Amazon Flipkart

Flipkart and Amazon India are hosting their festive season sale between September 29 and October 4. However, it seems that the sale will be marred with controversy this year. The Confederation of All India Traders (CAIT) on Tuesday reiterated its demand for ban on these festival sales. It said that the two e-commerce majors are flouting the norms for foreign direct investment (FDI) by carrying out festival sales. The traders’ body urged the Commerce Minister to look into the violation of the FDI policy by these e-commerce companies.

The CAIT is also asking to impose a ban on the declared festival sales and urged the government to institute an investigation into the business models of these companies. “Holding such sales and offering deep discounts are clear violations of Press Note No.2 of FDI policy 2018. The CAIT has earlier written to Union Commerce Minister Piyush Goyal to ban the declared festival sales by these e-commerce portals,” a CAIT statement said.

Praveen Khandelwal, Secretary General of CAIT  also strongly opposed the statements of Amazon and Flipkart. The e-commerce giants said that they empower the sellers on their respective platforms to decide the prices and offer their choice of selection to customers at the prices they deem fit and offer best value of their products to consumers. “The said statement of both the companies are devoid of any logic and just an eye wash to keep right the wrong practices they are conducting on their platform,” it said.

Khandelwal also said that these companies are indulging in blatant violation of the FDI policy of the Centre. CAIT noted that the key provisions of the FDI policy say that 100 percent FDI is allowed in the e-commerce marketplace model and under which e-commerce companies can only act as technical platforms. The policy clearly says that e-commerce entities will not influence the prices directly or indirectly and shall maintain a level playing field, the statement said.

“Since these e-commerce companies are not owners of the inventory how can they offer deep discounts on the inventory held by the sellers registered on their platform. As per policy, it should be the seller offering discounts but in this case the discounts are offered by e-commerce companies which is again a violation of e-commerce policy. Such festive sales offering deep discounts are nothing but influencing the prices directly or indirectly which is a clear violation of the policy,” it said.

The opposition to festive sale is the latest hurdle being faced by Amazon and Flipkart in India’s burgeoning e-commerce market. The two companies are trying to battle each other for the crown of leading e-commerce brand in the country.

(Written with IANS inputs)

  • Published Date: September 18, 2019 10:32 AM IST