Indian Government Directs Action Against Amazon and Flipkart

In a significant development concerning the ongoing dispute between e-commerce giants and Indian traders, the Union Government has instructed the Enforcement Directorate (ED) and Reserve Bank of India (RBI) to initiate necessary actions against Amazon and Flipkart, which is owned by Walmart.

Government’s Response to Complaints

The Centre has taken serious note of multiple complaints filed by the Confederation of All India Traders (CAIT) regarding the alleged violation of Foreign Direct Investment (FDI) Policy and the Foreign Exchange Management Act, 1999 (FEMA) by these companies. B.C. Bhartia, the National President of CAIT, and Praveen Khandelwal, the Secretary General, revealed that following numerous complaints to Union Commerce Minister Piyush Goyal, the Department of Promotion of Industries and Internal Trade (DPIIT) of the Ministry of Commerce issued a letter in December instructing the ED and RBI to take appropriate action against Amazon and Flipkart.

Complaints Forwarded to Authorities

In its communication to the ED and RBI, the DPIIT forwarded four specific complaints lodged by CAIT. These include allegations of FDI policy violations concerning Flipkart’s deal with Aditya Birla Group, misuse of FDI meant for manufacturing in the context of Multi Brand Retailing by various e-commerce entities, breaches of FEMA and its regulations by Amazon, as well as blatant violations of FEMA and FDI Policy by both Amazon and Flipkart, exploiting regulatory loopholes.

Traders’ Response and Future Plans

CAIT announced its decision to observe the year 2021 as “Bhartiya Vyapaar Samman Varsh” (Indian Trade Honor Year) under its auspices. The organization pledged to undertake all necessary measures to cleanse India’s e-commerce landscape, aiming to put an end to manipulative practices and exploitation. CAIT also expressed its commitment to encouraging traders nationwide to embrace digital commerce and digital payments as new avenues to expand their businesses across India.

In conclusion, the government’s directive to the ED and RBI marks a significant step in addressing the concerns raised by Indian traders regarding alleged violations by major e-commerce players. As regulatory scrutiny intensifies, the outcome of these actions will likely shape the future trajectory of e-commerce regulation in India, impacting both industry players and stakeholders alike.