Commerce and Industry Minister Piyush Goyal has asked Department for Promotion of Industry and Internal Trade (DPIIT) to summon Amazon India and Flipkart over alleged violations of Foreign Direct Investment (FDI) policy.
The Confederation of All India Traders (CAIT) met Goyal on Wednesday to show him evidence pertaining to 'deep discounting and predatory pricing' by Amazon India and Flipkart during their festive sales, said a press release by the trader body.
CAIT alleged that Amazon and Flipkart indulged in deep discounting, predatory pricing, exclusivity and promotion of preferred sellers on their platforms, which are not permitted under the FDI policy. It further said that these firms were creating an uneven playing field. CAIT added that the government must ensure an audit on the functioning of e-commerce sites.
CAIT's secretary-general Praveen Khandelwal had led the delegation to meet Goyal on Wednesday. Arvinder Khurana, president, All India Mobile Retailers Association, Dhairyasheel Patil, president, All India Consumer Products Distributors Federation, Guruprasad Mohapatra, secretary of the Department for Promotion of Industry and Internal Trade (DPIIT) and other officers were part of the delegation.
"The minister firmly said the government was committed to implement the FDI (foreign direct investment) policy in its letter and spirit. No predatory pricing or deep discounting will be allowed under any circumstances. Any re-routing of business in e-commerce will not be allowed. E-commerce companies will have to work only as a marketplace, as spelt out in FDI policy," Khandelwal stated in the release.
CAIT said that Goyal instructed Mohapatra to summon both companies to give their explanation on the points raised by CAIT.
"The minister assured the delegation that if the need arises and unethical business practices are proven, the government might order an investigation," said Khandelwal.