Traders body CAIT has alleged that e-commerce firms such as Amazon, Flipkart and Snapdeal are violating FDI norms by holding forthcoming festive season sales and it has complained to the Commerce Ministry.
“These companies solicit general public into their respective sales by big advertisement campaign on print, electronic and social media... the advertisements addressed to the public in general tantamount to retail trading,” Confederation of All India Traders said in a statement today.
“These companies claim to be a marketplace and therefore can provide only a technology platform for the sellers who are registered with them. Since ownership of inventory does not hold by the said companies they can not offer ‘sale’ or ‘discounts’ in totality on their online portals, but they are doing so which also establishes that they are not marketplace and as such openly flouting FDI policy,” it added.
The body also said it has complained to the Commerce Ministry to take action against these companies.
“In a complaint sent today to Secretary, Department of Industrial Policy & Promotion, Ministry of Commerce, the CAIT has demanded that not only these companies be restricted to conduct such sales but necessary action should be taken against them for violation of FDI policy,” it added.
CAIT said it has also sent a copy of their complaint to Finance Minister Arun Jaitley and Commerce Minister Nirmala Sitharaman calling for their immediate intervention and directing the concerned officials to take immediate action.
At present, 100 per cent foreign direct investment is allowed in business to business (B2B) in e-commerce but FDI is not allowed in B2C e-commerce.
