CAIT demand action against e-commerce firms for FDI violation

By

Maverick Martins

Published
Sep 25, 2017

The Confederation of All India Traders (CAIT) has demanded action against leading e-commerce firms for violation of the FDI (foreign direct investment) policy.
 

CAIT in a letter to the Union Commerce Minister Suresh Prabhu has urged the government to take action against e-commerce firms for undertaking illegal retail trading activities.
 
"The Confederation of All India Traders has charged Amazon, Flipkart and Snapdeal etc for violation of FDI policy for e-commerce of the Government issued on 29 March, 2016 by Department of Industrial Promotion & Policy, Ministry of Commerce," the traders' body said in a statement.

In its complaint, CAIT said "the advertisements issued by e-commerce firms in past days amounts to soliciting retail customers at their portals and influencing the prices and creating an uneven level playing field".
 
CAIT Secretary General Praveen Khandelwal said that by inserting big advertisements in the media, the companies are attempting to address consumers directly which is a contravention of the FDI guidelines.
 
"E-commerce firms do not have ownership of the inventory of the products purported to be sold on their technology platform, how can they offer discounts or discounted prices on the products for which they are not the owners-questioned trade leaders," Khandelwal said.
 
All leading e-commerce firms started their sale events from September 20 onwards offering heavy discounts and cashback across all categories. The firms also spent heavily on advertisements and Flipkart & Amazon together reportedly spent around Rs 100 crore (approx $15.5 million) on advertisements alone to promote their sale events across all platforms.
 
The trader’s body has demanded that necessary immediate action should be taken against the firms for violation of FDI policy.