Amazon's new India seller under govt probe for FDI violation

By

Maverick Martins

Published
Oct 19, 2016

The Indian government will look into the matter of Amazon launching group company Amazon Export Sales LLC, which is registered overseas, as a seller on its recently introduced Global Store on the India site. It will examine if any foreign direct investment guidelines have been broken.

 
The matter has been brought to the notice of the Department of Industrial Policy and Promotion (DIPP) and is under consideration, a senior government official said.
 
“We will have to see what is happening and consult the RBI, Enforcement Directorate if required and any other department concerned to understand if there is any violation of FDI policy,“ the official said.

Amazon India had denied that this violated FDI norms because the unit was registered overseas and all transactions would be concluded outside the country.
 
According to e-commerce guidelines issued by the DIPP, companies such as Amazon qualify as marketplaces that cannot have any business-to-consumer dealings and they simply act as a facilitator between buyer and seller.
 
The marketplace rules specify that no more than 25% sales can accrue to a single seller.
 
The policy itself is under review, along with several aspects of e-commerce trade, by a high-level committee set up by NITI Aayog under the chairmanship of its CEO Amitabh Kant.
 
The NITI Aayog committee has taken the views of e-commerce companies on the foreign direct investment policy and will give its recommendations to the Prime Minister's Office soon.