Piyush Goyal warns Amazon, Flipkart of action for continued non-compliance of FDI policy

by Apparel Resources News-Desk

26-June-2019  |  2 mins read

Commerce and Industry Minister, Piyush Goyal
Image Courtesy: indianexpress.com

Commerce and Industry Minister Piyush Goyal, during a closed-door meeting, has told foreign e-commerce firms such as Amazon and Walmart-led Flipkart that they must ensure compliance with the new FDI rules, aimed at deterring them from providing steep online discount.

Senior executives of eBay, Snapdeal, Makemytrip, Swiggy, Grofers and Reliance Jio were also among those who attended the meeting.

The Government brought in the new policy in February after complaints from small traders who said the e-commerce giants used their control over inventory from affiliated vendors to create an unfair marketplace in which they offered major discounts.

They allege big online retailers use complex business structures to circumvent the policies, and burn billions of dollars to offer discounts. Such practices are now prohibited after the implementation of the new policies.

Piyush Goyal said that while the Government was prepared to listen to the concerns about its new FDI rules, it was committed to protecting the small traders.

Amazon and Flipkart raised concerns as they say they’ve complied with the rules and deny any wrongdoing. Both the companies and the US Government protested against the rules in January, saying they would force big firms to change their business structures.

Furthermore, the meeting turned into a verbal spat between the “swadeshi” e-commerce players such as Snapdeal, IndiaMart and ShopClues on one side and Amazon and Flipkart on the other.

Snapdeal hit out at Amazon and Walmart-controlled Flipkart, alleging that they were using a ‘veneer of compliance’. Soon, Amazon India head Amit Agarwal jumped in to dismiss the allegations, suggesting that broad-brush accusations were not in order.

An inter-ministerial panel under an Additional Secretary at the Department for the Promotion of Industry and Internal Trade would be formed to address their grievances on FDI policy for e-commerce. This panel will have representatives from the Ministries of Commerce, MSME, Consumers Affairs and legal experts.

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