Centre asks ED, RBI to act against Amazon, Flipkart for violation of FDI and FEMA rules

Centre asks ED, RBI to act against Amazon, Flipkart for violation of FDI and FEMA rules

Centre asks ED, RBI to act against Amazon, Flipkart for violation of FDI and FEMA rules

The Department for Promotion of Investments and Internal Trade (DPIIT), which falls under the Ministry of Commerce and Industry, has written to the Enforcement Directorate (ED) and the Reserve Bank of India (RBI) asking them to take necessary action against Amazon and Walmart-owned-Flipkart.

The Centre has taken cognisance of various complaints made by the Confederation of All India Traders (CAIT) for blatant violation of FDI Policy and Foreign Exchange Management Act, 1999 (FEMA) by these companies.

In a letter dated 22 December, the DPIIT has asked the ED and the RBI to look at CAIT’s complaints alleging that Amazon and Flipkart had violated Foreign Exchange Management Act (FEMA) rules and foreign direct investment (FDI) policy by adopting illegal structuring/investments and practices, reports The Hindu.

According to a press release issued by CAIT on Thursday, the Centre has also forwarded four complaints of CAIT, including violation of FDI policy in the deal between Flipkart and Aditya Birla Group, violation of FDI policy related to FDI in manufacturing which is being used for multi-brand retailing by various e-commerce companies, violation of FEMA and its rules by Amazon, and FEMA and FDI policy by Amazon and Flipkart and exploitation of loopholes by them.

CAIT Secretary General Praveen Khandelwal said that all efforts will be made in 2021 to clean up the e-commerce landscape of India. The idea is to end an era of manipulations, malpractices and exploitation, the release said. “CAIT will promote and encourage traders across the country to adopt digital commerce and digital payments as new instruments to widen business in India,” the release read.

CAIT has also announced that traders across the country will observe  2021 as "Bhartiya Vyapaar Samman Varsh" under the aegis of CAIT.  "All efforts will be made to clean the e-commerce landscape of India and an era of manipulations, mal-practices and exploitation will come to end as CAIT will promote and encourage traders across the country to adopt digital commerce and digital payments as new instruments to widen the net of business in India."