DPIIT holds meeting with Amazon, Flipkart following CAIT complaint

It has been alleged by the Confederation of All India Traders (CAIT) that ecommerce companies are following an unethical business model and are infringing foreign direct investment norms.

Senior officials of the Department for Promotion of Industry and Internal Trade (DPIIT) on Thursday held a meeting with representatives of ecommerce firms Amazon and Flipkart following a complaint by Confederation of All India Traders (CAIT), the traders' body.

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Its Secretary-General, Praveen Khandelwal, has alleged that ecommerce companies are following unethical business models and are infringing on foreign direct investment norms.

They have also alleged that ecommerce companies are involved in predatory pricing, deep discounting, loss funding, and exclusivity of various products which is not allowed under the FDI policy.

The meeting was chaired by an additional secretary-level officer of the department.

Commenting on the meeting, Amazon spokesperson said, "We had open and transparent discussion with DPIIT officials. We thank the Ministry of Commerce and Industry for the opportunity and we are always available for further engagement as needed."

In a statement issued on Wednesday, CAIT has stated that realising the impact and importance of the issue raised by it, Commerce and Industry Minister Piyush Goyal has directed DPIIT Secretary Guru Mohpatra to call both Amazon and Flipkart to clarify the points.

"Instead of playing in a business-like manner as obligatory on them as per fundamentals of marketplace model, online retailers are by-passing all such fundamentals and taking advantage of systematic loopholes," it has said.

Earlier in June, it was announced the government would be putting in an institutional framework in place to bring out a national ecommerce policy within the next 12 months. The announcement was made by Commerce and Industry Minister Piyush Goyal during his second marathon meeting with stakeholders, including ecommerce companies.

A draft for the national ecommerce policy was released in February, which proposed setting up a legal and technological framework for restrictions on cross-border data flow and also laid out conditions for businesses regarding collection or processing of sensitive data locally and storing it abroad.

Disclaimer: Additional background information has been added to this PTI copy for context

(Edited by Evelyn Ratnakumar)


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