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(Photo: Mint)
(Photo: Mint)

Amazon, Flipkart execs meet DPIIT officials over deep discounting allegations

  • CAIT accused the e-commerce majors of following unethical business models and violating FDI norms
  • CAIT alleged that e-commerce companies are greatly influencing the prices and creating an uneven level playing field

New Delhi: After complaints from brick and mortar retailers alleging predatory pricing and deep discounting by the e-commerce companies during their ongoing festive sales, senior officials of the Department for Promotion of Industry and Internal Trade (DPIIT) on Thursday met representatives of Amazon and Flipkart.

Confederation of All India Traders (CAIT) Secretary General Praveen Khandelwal had alleged that e-commerce companies are following unethical business models and violating foreign direct investment norms.

The meeting was chaired by an additional secretary-level officer of the department. However, an official word on the meeting was not available.

PTI reported an Amazon spokesperson saying, "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 said a delegation of traders led by Khandelwal met trade minister Piyush Goyal who in turn assured that if unethical business practices are proven, government may order an investigation.

CAIT has alleged that e-commerce companies are greatly influencing the prices and creating an uneven level playing field, which is strictly prohibited under the FDI policy. “The policy is being flouted over the years right under the nose of the government but so far no action has been taken against them. These e-commerce companies are snatching the business of offline traders by unethical business practices," CAIT said in a statement.

The Federation of All India Vyapar Mandal, another body of offline traders also said in a statement on Thursday that they made a similar complain to Goyal on 3 October. It alleged that e-commerce companies are also offering installments to attract more and more customers, due to which the traditional retail market and business are being adversely affected.

In February, India’s new investment rules for the e-commerce sector jolted Amazon Inc and Walmart’s Flipkart as the companies were forced to change their business structures to continue to operate in the country. The rules were aimed at protecting India’s brick-and-mortar retailers by deterring big online retailers from giving steep discounts to attract shoppers.

Goyal, earlier this month, defended India’s decision by reiterating that the government cannot let “small traders die" and that he had urged e-commerce companies to follow all the rules. “E-commerce is a platform that provides opportunity to buyers and sellers in an agnostic fashion. It is not expected to be a platform for predatory pricing," he said speaking at the India Economic Summit organized by the World Economic Forum.

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