The government has sought from Amazon and Flipkart to provide details of their top five sellers after brick-and-mortar trade lobby groups complained that they were in violation of foreign direct investment (FDI) norms. Amazon asserted it was fully compliant with the rules. Details sought from the e-commerce marketplaces include business done by the top five sellers, investments and commission agreements with vendors. The Department for Promotion of Industry and Internal Trade (DPIIT) is understood to have also asked if the marketplaces are compliant with goods and services tax (GST) in letter and spirit. The Confederation of All India Traders (CAIT) is among those that have complained to the government. DPI has sent two questionnaires to the e-commerce firms, seeking details of capital structure, business models and inventory management systems.
“Amazon has a high bar for compliance, and we continue to comply with all applicable laws of the land,” a spokesperson said in an emailed response. “Amazon.in is a third-party marketplace where sellers offer products to customers for sale. Sellers on amazon.in have the absolute discretion to decide what products to sell and at their prices. Amazon cannot, and does not, participate in sellers’ decisions related to their products and their prices,” said Amazon’s spokesperson. Commerce and industry minister Piyush Goyal on Thursday said the government would take stringent action against e-commerce companies if they are found to be violating India’s e-commerce policy in “letter or spirit.” He also said his ministry had sent a questionnaire seeking information, and another was being issued. “We appreciate the initiative by the commerce and industry minister to set up an interactive platform for players to come together,” the Amazon spokesperson said.
CAIT has often complained against predatory pricing and discounts, along with other violations of the FDI policy, particularly during the festive season, when attractive offers abound. The likes of Flipkart and Amazon could generate up to $6 billion, or INR 39,000 crore, in sales this festive season, as per consultancy RedSeer. A clarification of Press Note 2 issued in December said marketplaces are barred from selling products from sellers where they have equity interest and from entering deals with any brand to sell any product exclusively on their platform.
“If law has been violated in any manner, strictest action will be taken,” Goyal said. “BJP, the Modi government, are very clear that we stand with the small retailers.” It is also reported that PMO is monitoring the situation