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DPIIT forwards traders body’s complaints against Amazon, Flipkart to ED and RBI

The Department for Promotion of Industry and Internal Trade (DPIIT) has forwarded complaints against Amazon and Flipkart, made by traders body Confederation of All India Traders (CAIT), to the Enforcement Directorate and the Reserve Bank of India for “necessary action”. MediaNama has seen a copy of the letter sent by the DPIIT. 

In particular, the DPIIT has forwarded the following complaints made by the CAIT:

  • Aditya Birla Fashion Retail’s sale of a 7.8% stake to the Flipkart Group for 1,500 crore, which CAIT had earlier urged the government to stall, citing violations of India’s FDI regulations.
  • Alleged violation of FDI Policy related to Foreign Direct Investment (FDI) in manufacturing, which CAIT had claimed was being used for multi brand retailing by various e-commerce companies
  • Complaints against Amazon and Flipkart for allegedly violating the Foreign Exchange Management Act, 1999.

CAIT’s opposition to e-commerce giants and Chinese-backed startups

Claiming to represent 70 million (7 crore) traders, CAIT has consistently raised voices against e-commerce companies and their “inadequate” regulation. At least since 2016, CAIT has opposed e-commerce entities for alleged FDI violations. CAIT describes itself as being concerned with retail trade, Goods and Services Tax issues, and FDI in e-commerce and retail trade.

In 2016, it complained to the erstwhile Department of Industrial Policy and Promotion about alleged FDI violations by Flipkart. Since then, it has opposed Walmart’s acquisition of Flipkart, Amazon’s takeover of Aditya Birla Retail’s More supermarket chain, and generally demanded stricter e-commerce regulations, including the need for a dedicated e-commerce policy and regulator. It had even initiated legal action at the National Company Law Appellate Tribunal in an attempt to block the Walmart-Flipkart deal. Last year, Praveen Khandelwal, CAIT’s general-secretary and its most visible face, had accused e-commerce companies of stalling policies regulating them and complained that the most popular sellers on e-commerce marketplace were offshoots of the marketplaces themselves.

In recent months, it has expanded its scope beyond e-commerce or retail, speaking up against Chinese investments in over a hundred Indian startups, many of which had little or nothing to do with e-commerce or retail trade. Rallying against China on any issue, especially after the Galwan Valley clash, is an easy way to grab eyeballs. CAIT had called the investments a “strategic move” by  China to discreetly “command” Indian innovations and technology. Last week, it called for formation of a regulatory authority to monitor Bollywood, Television, and Over-The-Top content, believing them to spread negativity.

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