Accusing e-commerce companies of flouting FDI rules, traders body Confederation of All India Traders (CAIT) has urged the government to conduct an investigation on these players for “predatory pricing” and offering “deep discounts” during the festive season. It has also urged the government to order a blanket ban on such festival sales offered by e-commerce companies.
In a letter to Union Minister Piyush Goyal, it said, “CAIT would like to draw the attention to the fact that e-commerce marketplaces such as Flipkart and Amazon have been continuing to blatantly violate the FDI norms applicable to e-commerce vide Press Note 2 of 2018 by indulging in below-cost predatory pricing while operating on losses.”
Stating that regulations prohibit e-commerce marketplaces from influencing prices of the products on their platforms, CAIT pointed out that by offering deep discount ranging from 10 to 80 percent on their platforms, these e-commerce players “are clearly influencing the prices and creating an uneven level playing field which is in direct contravention of the policy.”
“Sales (Festive) can be organised only by the owners of inventory and since these companies are not the owners of inventory how can they offer discounts on the products owned by sellers registered on their platform which establish the fact that these companies hold control over the inventory which is against the FDI Policy,” the letter added.―The Hindu Business Line