CAIT demands stay on business ops of Amazon & Flipkart, says discounts flout FDI policy

The Confederation of All India Traders (CAIT) has charged e-commerce biggies Amazon, Flipkart and Snapdeal – and others – for violating India’s FDI policy for e-commerce issued by the Government on March 29, last year.
The traders’ body has filed a complaint with Union Commerce Minister Shri Suresh Prabhu calling for stay of business operations of these companies.
Under the FDI policy, according to CAIT, these e-tailers cannot undertake retail trading activities but “these e-commerce portals being habitual offenders of government policies, are circumventing the law and engaging in B2C activities which are prohibited for e-commerce marketplace portals”.
In its complaint, CAIT has demanded that not only these companies be restricted to conduct sales with massive discounts but have also asked for a stay in business operations of their respective portals. The body has also demanded that necessary immediate action should be taken against them for violation of FDI policy.
CAIT said that as per FDI policy guidelines e-commerce portals receiving FDI can conduct business activities for B2B business and will not be allowed to B2C business and as such the ads issued by them in past days amounts to soliciting retail customers at their portals and influencing the prices and creating an uneven level playing field.
CAIT has also quoted Clause 2.3(ix) of the policy, which states tat e-commerce entities providing marketplace will not directly or indirectly influence the sale price of goods or services and shall maintain a level playing field.
 
CAIT National President BC Bhartia and Secretary General Praveen Khandelwal said these e- commerce portals are circumventing the law and engaged in Business to Consumers (B2C) activities which is prohibited for e commerce marketplace portals.
By inserting big advertisements in the media, they are attempting to address Consumers directly which is contravention of the aforesaid guidelines. It is further submitted that it is also an attempt to influence the sale price directly or indirectly and create an uneven level playing filed. They 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.