Two of the biggest e-commerce players in India, Flipkart and Amazon along with the Central Government were issued a notice by the Delhi High Court for allegedly violating the country’s Foreign Domestic Investment (FDI) policy. As per the issued notice, the centre, Flipkart and Amazon have to answer the court by November 11 on the plea against them.
The issue was brought upon by a PIL filed by an NGO, Telecom Watchdog, which claimed that Amazon and Flipkart have created various bodies to evade the FDI norms and sell products at a much lesser price than other small brick-and-mortar stores.
The NGO is also seeking action against the two e-commerce arch-rivals under the Foreign Exchange Management Act (FEMA) for the alleged violation and escaping of FDI policies.
Notably, the petition filed by the NGO states that their claims are according to Press Note 3 of 2016, that governs FDI in e-commerce sector, and says organisations like Amazon and Flipkart are not to exercise ownership over the stock, and are barred from influencing the price of goods and services available for sale on their respective marketplace because of the foreign funding they get.
Furthermore, the NGO claimed that with the help of a few name lending companies owned by both the companies, they buy stock from the manufacturer in bulk at a discounted price and that gives them the edge over small retailers and that is a clear violation of the FDI norms.
Both Amazon and Flipkart have not yet responded to any of the queries related to the matter, however, the PIL filed against them also marks out that Exchange offers, EMI costs and bank offers are funded completely or partially by Amazon and Flipkart itself and constitute a clear influence on price in violation of FDI in the nation.
