CAIT urges govt to ban festival sales by e-commerce players

Traders' body CAIT on Friday urged the government to ban festival season discount offers by e-commerce companies like Flipkart and Amazon, as it violates FDI norms.

In a letter to Commerce and Industry Minister Piyush Goyal, Confederation of All India Traders (CAIT) said festival sales and deep discounts being offered by various e-commerce companies are against the mandate for foreign direct investment policy.

"...we request you to please immediately look in to the matter and stop these Companies for organising any festival sales or other sales having an element of predatory pricing or deep discounting," the CAIT, which specifically mentioned Flipkart and Amazon in its letter to the minister.

The traders' body also provided "substantial evidence" of e-commerce portals indulging into predatory pricing and deep discounting.

Since they are openly flouting FDI norms, it said, a "blanket ban" on festival sales should be ordered.

It has also demanded an investigation as to how these companies are flouting FDI norms.

CAIT has cited that under the existing law, e-commerce marketplace entities are bared from directly or indirectly influencing the sale price of goods or services.

E-commerce companies offer discounts to attract customers during festival season. In festive season people make large purchases.

When contacted, Amazon India spokesperson said the festive season in India is the biggest shopping season and the sellers look forward to the opportunity to fulfil customer needs.

"Our marketplace provides this opportunity to more than five lakh sellers, a majority of whom are small businesses, women entrepreneurs, startups, weavers and artisans as well as emerging brands to offer their products to customers across India," the spokesperson said.

Moreover, sellers decide the pricing for their products and offer their choice of selection to customers across the country at prices that they deem fit, the spokesperson added.

"As an e-commerce platform we are boosting economic activity in India, supporting local manufacturing, Indian handicrafts and creating lakhs of new jobs in line with the vision of Hon'ble PM Modi," Flipkart said in an e-mailed statement.