Confederation of All India Traders claims that festive sales flout FDI norms and wants a blanket ban on them.

Traders union writes to Piyush Goyal seeking ban on Amazon Flipkarts festive sales
Atom E-commerce Saturday, September 14, 2019 - 14:47

With e-commerce majors Flipkart and Amazon set to launch their flagship festive sales, Confederation of All India Traders has written to Piyush Goyal, minister for commerce and industry to ban these sales alleging violation of the FDI policy.

“We invoke your kind and immediate attention to festival sales declarations by various e-commerce companies where such companies are offering deep discounts which runs against the mandate of Press Note No.2 of FDI Policy, 2016 later amended in 2018,” Praveen Khandelwal, secretary of CAIT wrote in the letter.

CAIT wants a blanket ban on such festival sales and an investigation to be conducted as to how these companies are flouting FDI norms.

The FDI policy states that e-commerce marketplaces cannot exercise ownership over inventory and that these companies cannot influence the price of goods directly or indirectly.

CAIT alleges that the companies hold control over the inventory since they offer discounts on products owned by registered sellers.

“By offering deep discounts ranging from 10% to 80% on their e-commerce portals, these companies are clearly influencing the prices and create an uneven level playing field, which is in direct contravention of the policy,” the letter states.

CAIT has asked Piyush Goyal to look into the same and stop Flipkart and Amazon from organising festive sales, or any other sales where deep discounts are offered.

Amazon told TNM that its sellers look forward to the sales as an opportunity to fulfil customer needs. “Our marketplace provides this opportunity to more than five lakh sellers, a majority of whom are small businesses, women entrepreneurs, startups, weavers and artisans as well as emerging brands to  offer their products to customers across India. Sellers decide the pricing for their products on our marketplace. They offer their choice of selection to their customers across the country at prices that they deem fit,” a company spokesperson said.

Flipkart says that through its customer insights platform, it helps local manufacturers to produce right products and help them cater to different customer segment appropriately. 

"Today almost 200,000 local sellers, artisans and manufacturers have access to over 150 million customers. We have also brought in thousands of kiranas and general trade stores to boost last mile connectivity and augment their income.  As an e-commerce platform, we are boosting economic activity in India, supporting local manufacturing, Indian handicrafts and creating lakhs of new jobs," it said in a statement to TNM. 

Flipkart is set to launch its flagship Big Billion Days sale from September 29, which will go on till October 3. Flipkart will be offering deals across mobiles, gadgets, TVs, appliances, fashion, personal care, furniture and more.

Amazon too, is set to launch its Great Indian Festive Sale. However, it has not yet revealed dates for the sale. The app and website show that there will be new launches across technology brands and massive offers and discounts across electronics, home appliances, fashion, home and kitchen products, among others.

This is not the first time CAIT has raised issues with e-commerce players. They met with Goyal in June and called for an immediate rollout of the e-commerce policy.

They also earlier opposed to Amazon’s acquisition of More and Walmart’s acquisition of Flipkart.

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