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CAIT complains commerce ministry for violation of FDI norms by E- commerce firms

CLR Note: The Confederation of the All India Traders Association has alleged that e-commerce firms are violating FDI norms by  holding the festive sales and these companies solicit general public which tantamounts to retail trading and FDI is strictly prohibited in the reatil trading format.

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,”

“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.”

The body also said it has complained to the Commerce Ministry to take action against these companies.

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.

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.

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