BANGALORE: While the nation is embedded with excitements for the Festive season sales which are going to happen from 13th to 17th October. The e-commerce giants may be facing some trouble for violating foreign direct investment norms, since the Confederation of All India Traders (CAIT) has filed a complaint to the commerce minister Nirmala Sitharaman regarding the festive season sales on the portals such as Amazon, Flipkart and Snapdeal, reports rediff.com
The CIAT stated that “These companies solicit the general public into their respective sales by big advertisement campaign on print, electronic and social media... the advertisements addressed to the public in general tantamount to retail trading,”. The organization expects an immediate action thus has sent copies of the complaint to Finance Minister Arun Jaitley too.
It also added "These companies claim to be a marketplace and therefore can provide only a technology platform for the sellers who are registered with them. Since ownership of inventory does not hold by the said companies they cannot offer 'sale' or 'discounts' in totality on their online portals but they are doing so which also establishes that they are not marketplace and as such openly flouting FDI policy."
According to the current scenario, 100 per cent foreign direct investment is allowed in business to business in e-commerce but FDI is not allowed in B2C e-commerce. The CAIT also added that, "In a complaint sent today to Secretary, Department of Industrial Policy & Promotion Ministry of Commerce the CAIT has demanded that not only these companies be restricted to conduct such sales but necessary action should be taken against them for violation of FDI policy”
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