FDI violation complaints are forwarded to right agencies: Prabhu

Complaints related to alleged violation of FDI norms by e-commerce players are forwarded to Enforcement Directorate and RBI as they are the right agencies to look into them, Commerce and Industry Minister Suresh Prabhu said today.

"Suppose I receive a complaint...we forward it to the right agencies because they are the ones who are supposed to take cognisance. We are not making any value judgement on it. Violations are looked into by agencies mandated for them," he told reporters here.

Prabhu was replying to a query on the ministry's action on allegation of violation of foreign direct investment norms in the e-commerce sector.

RSS-affiliated Swadeshi Jagran Manch (SJM) had alleged that US retail giant Walmart was circumventing rules for a back-door entry into India with its majority stake acquisition of Flipkart.

Traders body CAIT too has filed complaints with the ministry on the issue and violation of FDI in e-commerce rules by certain online retail firms.

Department of Industrial Policy and Promotion (DIPP) Secretary Ramesh Abhishek said that after the policy is made by the department, it is notified under the FEMA (Foreign Exchange Management Act) by Reserve Bank of India with Department of Economic Affairs.

Any infringement of the law or allegation is investigated by the ED, Abhishek said.

On the Walmart-Flipkart deal, he said: "Under the e-commerce FDI policy, only the marketplace model is allowed. So the investment that they have is being made, what we have heard, in Flipkart is a marketplace model. Their (Walmart's) operations of business-to-business and cash and carry is separate".

Walmart Inc last month announced acquisition of 77 per cent stake in Flipkart for about USD 16 billion (Rs 1.05 lakh crore) in the largest e-commerce deal which will give the US retailer access to the Indian online market that is estimated to grow to USD 200 billion within a decade.

Domestic traders alleged that the deal is nothing but a clear attempt to control and dominate the retail trade in India by Walmart through e-commerce in the long run.

Replying to a question about US demand of cutting customs duties on Harley-Davidson motorcycle, Prabhu said that every country wants more and more market access for their products.

"We will formally hear from them and then we will respond it as appropriate and we will deal with that issue," Pabhu said.

The minister is visiting Washington next week to discuss trade and investment related issues with his US counterpart.