A day after trader’s body Confederation of All India Traders (CAIT) wrote to Union Commerce Minister Suresh Prabhu urging action against ecommerce companies such as Amazon, Flipkart and Snapdeal, CAIT Secretary General said that the minister has forwarded the complaint to Secretary of DIPP for appropriate action.
CAIT alleges that these companies were flouting FDI norms through their annual sales by undertaking retail trading activities. The complaint also stated that these players were influencing prices through advertising, thus creating an uneven level-playing field.
“Commerce Minister Suresh Prabhu took immediate cognisance of the complaint of CAIT made yesterday… CAIT will follow the matter with both Minister and Secretary DIPP and ensure that action must be taken against these Companies for their daring and daylight violation of FDI policy repeatedly since many years,” Praveen Khandelwal, Secretary General CAIT said.
In the complaint that CAIT made on Saturday, they demanded a stay on their business operations.
Praveen added that CIAT may even take the route if the need arises, claiming that these companies ‘are making a joke of the binding policy of the Government and are least bothered about law of the land.’
Amazon’s Great Indian Festival Sale, Flipkart’s Big Billion Day Sale took place from 21-24 September, while Snapdeal announced Unbox Diwali Sale from 20 to 25 September and Shopclues announced its Maha Bharat Diwali Sale from 20 to 28 September. These sales, according to CAIT are a blatant violation of the guidelines issued by the DIPP.
"Under FDI policy these companies cannot undertake retail trading activities but these e-commerce portals being habitual offenders of government policies are circumventing the law and engaged in B2C activities which is prohibited for e-commerce marketplace portals," CAIT wrote in the complaint.
As against the guidelines, according to which, these ecommerce players must purely act as a marketplace and discounts too should come from the brands and companies directly, Praveen says that through all the massive advertising done by the ecommerce players, they are attempting to directly address consumers, which is a contravention of the FDI guidelines.
"They (e-commerce firms named) 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," Economic Times quotes Praveen as saying.