The National Company Law Appellate Tribunal (NCLAT) has asked Walmart and local e-commerce platform Flipkart, which has just been acquired by the US-based retail biggie, to explain their business models in India. The move is important as the so-called \u2018deep discounts\u2019, offered by foreign-funded e-commerce companies in alleged violation of the FDI rules, continue to be an irritant for policymakers. Ambiguity persists on how effectively such \u2018non-compliance\u2019 is being handled by the enforcement agencies. The NCLAT, which is also an appellate authority over the Competition Commission of India (CCI), has asked Walmart International Holdings to file its reply before it by September 20, 2018. It has also asked traders\u2019 body CAIT, which has filed an appeal before NCLAT challenging the go-ahead by the CCI on Walmart\u2019s $16 billion acquisition of Flipkart, to file its understanding over the retail major\u2019s business model in India. \u201cBefore going into the merit of the appeal, we intend to know the manner in which WalMart International Holdings, Inc. and Flipkart Private Ltd do their business in the relevant market in India,\u201d said an NCLAT bench headed by chairman Justice SJ Mukhopadhaya. India\u2019s FDI policy bars e-tailers from influencing pricing of products sold on their platforms by giving discounts themselves. For their part, ecommerce players have maintained that they haven\u2019t violated any FDI rule and that discounts are not given by them but by the sellers on their platform. While clearing the Walmart-Flipkart deal as one that \u201cwon\u2019t have an appreciable adverse effect on competition\u201d in India, the CCI had said that the complaint about Flipkart\u2019s discounting practice or preference to select e-tailers is not specific to this merger deal and is \u201calready prevalent\u201d in the market. The CCI had said, \u201cUpon examination of the relevant facts, it was found that a small number of sellers in Flipkart\u2019s online marketplaces contributed to substantial sales. Almost all of these were customers of Flipkart in B2B segment, and hence were common customers, availing significant discounts from Flipkart in both B2B segment as well as in the online marketplaces.\u201d It added that the revenue earned from these common customers in the online marketplaces was also relatively less vis-\u00e0-vis the non-common sellers whose sales on the platform were considerably low. But the regulator said that this is a matter of consideration for the appropriate regulatory\/ enforcement authority. \u201cThe issues concerning FDI policy would need to be addressed in that policy space to ensure that online market platforms remain a true marketplace providing access to all retailers,\u201d it had said. Currently, while the Department of industrial Policy and Promotion formulates and notifies FDI policies, including those on e-commerce, any violation of such rules is dealt under the penal provisions of the Foreign Exchange Management Act (FEMA). This Act is administered by the Reserve Bank of India, and the ED is its enforcement authority. Earlier, on August 18, Walmart had informed that it has completed a deal with Flipkart and holds 77% stake in the Indian e-commerce major. Walmart India, a wholly-owned subsidiary of Walmart Inc, owns and operates 21 Best Price Modern Wholesale stores in eight states in the country.