Published
May 21, 2021
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CAIT urges government to investigate Flipkart for alleged FDI violations

Published
May 21, 2021

The Confederation for All India Traders urged the government once more to investigate U.S.-owned e-commerce business Flipkart for alleged foreign direct investment violations.

CAIT has again urged the government to investigate Flipkart - Alto Nivel


On May 20, CAIT levelled new allegations against Flipkart stating that the Walmart-owned business had restructured its organisation in a way that violated FDI regulations, the Press Trust of India reported. In a letter to the Minister for Commerce and Industry Piyush Goyal, CAIT stated that Flipkart had violated regulations, “by creatively structuring its marketplace business model and creating a facade in order to exercise control over inventory and retail prices, a practice expressly prohibited by the FDI Policy on e-commerce.”
 
CAIT asked for tax authorities to investigate the matter. Flipkart continues to deny CAIT’s claims as it has done before on numerous occasions, stating that its use of technology is in fact to aid its sellers.

“We will continue to operate with the same transparency, and in line with India's FDI and regulatory framework, while creating new livelihood opportunities and jobs,” said a Flipkart spokesperson in a statement, ET Bureau reported.

“With more than 3 lakh sellers on the Flipkart Marketplace, our seller partners are an integral part of the ecosystem.”
 
CAIT has alleged that Flipkart’s two-tier model consisting of ‘ADs’ and ‘Diamond Sellers’ which it created after Walmart had acquired the business, was created solely to give the business control over inventory and prices on the platform. Flipkart said that this is not the case. 

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