CAIT seeks action against Flipkart, Amazon for FDI norms violation

Traders' body CAIT on Tuesday lashed out at e-commerce majors Amazon and Flipkart and demanded that the government takes action against them for alleged violation of foreign direct investment (FDI) policy norms.

"The e-commerce market has been greatly vitiated by some of the major companies prominently Amazon and Flipkart who are bravely violating the FDI policy by indulging into all kinds of unethical and unfair business practices by offering deep discounts, indulging into predatory pricing, controlling inventory, having exclusivity of products and maintaining preferential seller system," said the Confederation of All India Traders (CAIT).

In a letter to Prime Minister Narendra Modi, CAIT National Secretary General Praveen Khandelwal said these companies are causing huge loss of Goods and Services Tax (GST) revenue to the government.

"Even after making huge sales, they are registering losses of thousands of crores of rupees every year, thereby devouding the government with huge revenue of income tax," he said.

By offering deep discounts ranging from 10 to 80 per cent on their e-commerce portals, these companies are clearly influencing the prices and creating an uneven level playing field which is in direct contravention of the policy, said Khandelwal.

On the other hand, about seven crore traders across the country are providing employment to about 40 crore people.

"We are of the considered view that digitalisation of traders is the need of the hour and e-commerce is fast-growing future mode of business. The alignment of traders with e-commerce will be a major step in achieving the target of five trillion dollar economy by 2024."

CAIT said it is most surprising that these companies are incurring thousands of crores of rupees losses every year but are still continuing their business activities which is much against the basic fundamental of business.

It appears that their investors are supporting them in funding the losses and as such it is not a business but a valuation game, which is creating an uneven level playing field and unfair competition in the market, it said.