‘Flipkart, Amazon are East India Company version 2.0; shut down bank-brands-e-tailer unholy nexus’

By: |
December 2, 2019 4:52 PM

With the war between traders and e-commerce portals getting fiercer, traders’ body CAIT has compared two of the leading online retail platforms Amazon and Flipkart with the British East India Company.

CAIT, probe, tax liability, Amazon, Flipkart, industry news, Nirmala Sitharaman“Since FDI is governed by the FEMA & Reserve Bank of India, it is demanded that an another enquiry may also be initiated on pattern of receivable funding and its disbursement,” CAIT said.

With the war between traders and e-commerce portals getting fiercer, traders’ body CAIT has compared two of the leading online retail platforms Amazon and Flipkart with the British East India Company and has asked for an immediate action against e-tailers. The seven crore-strong union has been staging nation-wide protests and has also asked for the shutting down of Jeff Bezos’ Amazon and Walmart-backed Flipkart’s India businesses in the past. The traders’ union has alleged deep discounting and predatory pricing and has said that these companies have taken a toll on India’s offline trade and are also harming indigenous businesses. 

The Confederation of All India Traders has been pushing the government to take action against the firms for flouting FDI norms. Recently, Piyush Goyal, Minister of Commerce said that the government will take action against the companies if they are found to be non-compliant with FDI rules. “FDI funded e-commerce player in the country has to follow the FDI policy both in letter and spirit and domestic e-commerce companies will have to follow the law of the land so that businesses of small retailers should not be destroyed,” Piyush Goyal recently said.

Unholy cartel of brands, banks and e-tailers

CAIT has alleged that brands, banks and e-tailers are equal party in this called them “unholy cartel”. “E-commerce companies, brand owing companies and banks “in a most strategic manner are deeply involved in ensuring predatory pricing and deep discounting,” CAIT said, adding that an immediate investigation must be carried out against the nexus. Brands sell the products at a much lower price than what they offer in offline market and sometimes, products are exclusively available only to e-commerce companies, CAIT said. 

Banks, on the other hand, provide cashback and various other incentives to goods purchased from e-commerce portals. “It is important to note that banks are giving this facility exclusively to e-commerce market and not to offline market,” CAIT said. 

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