Online traders meet Piyush Goyal over alleged FDI violations by etailers

Online traders meet Piyush Goyal over alleged FDI violations by etailers
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10 Oct, 2019

A delegation of online traders met the minister of commerce and industry Piyush Goyal on Wednesday to discuss ecommerce platforms’ alleged foreign direct investment policy violation.


Online traders are reportedly upset with ecommerce platforms giving heavy discounts to consumers and indulging in predatory pricing. 


Goyal has now asked the department for the promotion of industry and internal trade (DPIIT) to convene a meeting with representatives from e-commerce firms, including Amazon India and Flipkart to address the issue. 


The delegation included representatives from the Confederation of All India Traders (CAIT), All India Mobile Retailers Association, All India Consumer Products Distributors Federation among others.


Praveen Khandelwal, the secretary-general of CAIT, said online platforms indulge in predatory pricing and deep discounting, according to a statement. Online companies also negotiate exclusive sale agreements with brands and promote preferred sellers, violating provisions of Press Note 2, which was issued in December 2018. 


Earlier this month, CAIT had filed a writ petition against Amazon and Flipkart in Rajasthan High Court, alleging the violation of government FDI norms.


In June, Goyal had convened a meeting of chief executive officers of e-commerce firms to reiterate that violation of FDI norms will invite close scrutiny.


The ministry had also asked ecommerce firms to submit their business models to DPIIT. 


The provisions laid down in Press Note 2 also requires ecommerce companies to upload a third-party audited report on compliance with FDI norms. The deadline for the reports was September 30. However, a lack of clear guidelines on the format has apparently led to etailers failing to submit the reports on time. 


The national ecommerce policy, which lays down guidelines to address the marketplace operations for e-commerce entities, is also likely to be tabled next year, according to media reports.