CAIT demands 'strict action' against Amazon for alleged violation of laws

Traders' body CAIT said it has written to the ED seeking "strict action" against Amazon, claiming that the e-commerce major has caused "misery" to small traders by resorting to predatory pricing

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Traders' body CAIT on Sunday said it has written to the Enforcement Directorate seeking "strict action" against Amazon, claiming that the e-commerce major has caused "misery" to small traders by resorting to predatory pricing.

The Confederation of All India Traders (CAIT) said it has written to ED with all the "necessary details to prove that since the beginning of Amazon in India in 2012, it has brazenly and flagrantly violated the laws, rules and regulations of our country and has caused misery to crores of small traders (by resorting to predatory pricing) who are sought to be protected by the FDI Policy and the FEMA Rules and Regulations".

CAIT claimed that despite the constant violations no action has been taken against Amazon because of which 7 crore traders of the country along with the workers and people connected to them are feeling cheated and left out.

"Taking into account the sentiments of Indian retailers and not to forget the amount of damage caused by the foreign E-commerce giants immediate and strict action is required and CAIT demands the ED to do the needful," it stated.

Amazon India did not respond to an email query seeking comments on the issue.

CAIT Secretary General Praveen Khandelwal said it has also raised questions as to "how Amazon through Amazon Seller Services Private Limited (Amazon India) and other owned subsidiaries and benamis have been carrying on multi brand retail trading (inventory based model of e-commerce) in the garb of marketplace based model".

He said this was in complete violation of FDI Policy, Press Notes and FEMA Act, Rules and Regulations.

"In our communication to ED we have highlighted how Amazon has invested in More Retail Limited, a MBRT Company and has put up a 'Front' namely 'Samara AIF', not only this, how the AIF structure which has been allowed by SEBI for the purpose of pooling of money of investors for financial investment and returns has been misused to control MBRT companies which could not have been otherwise done by Amazon," Khandelwal said.

He demanded that ED should immediately call for all documents and agreements from Amazon.

"ED, CCI (Competition Commission of India) and DPIIT (Department for Promotion of Industrial Policy and Internal Trade) should examine the same and punish Amazon for all the transgressions by imposing a maximum penalty that is, three times the value of the illegal investments of Rs 48,500 crore a penalty of Rs 1,44,500 crore must be imposed," Khandelwal said.