CAIT urges DPIIT to take action against Amazon, Flipkart alleging fresh violations

By

Isabelle Crossley

Published
Nov 23, 2020

The Confederation of All India Traders has urged the Department for Promotion of Industry and Internal Trade to investigate and penalise e-commerce giants Flipkart and Amazon for alleged violations. 

 
CAIT has alleged that Walmart-owned Flipkart and Amazon have violated the Foreign Exchange Management (Non-debt Instruments) Rules, 2019 through their business practices in India. CAIT cites public documents pertaining to investments by both businesses as evidence for its claims among other things.
 
“Our association has been requesting your good office to take appropriate steps and investigate, punish and penalise the multinational companies like Amazon and Flipkart (owned by foreign multinational company 'Walmart', interchangeably used hereinafter) for the blatant violation and/or by exploitation of the loopholes of the FDI policy and Foreign Exchange Management Act,” CAIT wrote in a letter to DPIIT secretary, Guruprasad Mohapatra, Indo-Asian News Service reported. 

CAIT criticised Amazon’s investments in Future Group’s More Retail Limited and stated that the U.S. business has, “claimed that it has absolute control over Future Retail Limited through the shareholder agreement between Amazon and Future Coupons Private Limited.” 
 
The traders’ body also said that Flipkart is operating on an inventory-based model in India which would be prohibited as it is owned by a foreign entity.

“Flipkart has been controlling the inventories of the goods and services being sold on its e_commerce marketplace platform operated by its e-commerce marketplace entity named Flipkart Internet Services Limited,” claimed CAIT.

“Such control is exercised through sale of goods and services through its affiliate companies, such as WS retail, Omnitech retail etc.”
 
CAIT has long protested the business practices of both Flipkart and Amazon, staging protests across India, communicating with government bodies, and rallying its member traders. The organisation criticises the U.S.-owned businesses for allegedly monopolising the Indian market and harming local businesses.