Following complaints by the Confederation of All Traders for violating Foreign Direct Investment violations, the government of India directed its Enforcement Directorate and Revenue Bank of India to penalize Amazon and Flipkart.
A dispute between e-commerce giants Amazon, Flipkart, and Indian traders led the Indian government to direct its Enforcement Directorate (ED) and Reserve Bank of India (RBI) to take measures against American multinational Amazon and Walmart-owned Flipkart.
The Indian government acted on the numerous complaints by the Confederation of All Traders (CAIT) that said the two companies violated India’s Foreign Direct Investment (FDI) policy and Foreign Exchange Management Act, 1999 (FEMA). In its letter issued in December, the Department for Promotion of Industry and Internal Trade (DPIIT) asked both ED and RBI to take action against Amazon and Flipkart. In the recent past, CAIT raised several complaints to the Indian Minister of Commerce and Industry Piyush Goyal, about the two e-commerce giants.
CIAT states that DPIIT has forwarded four of its complaints that highlight:
- FDI violation in a deal between Flipkart and Aditya Birla Group
- FDI violation in multi-brand retailing
- Violation of FEMA by Amazon
- Both the online shopping firms finding loopholes within the laws
In its complaint, CIAT had said: “Traders across India will conserve 2020 as Bhartiya Vyapaar Samman Varsh (the year to honor Indian trade) and will put forth efforts to bring about a clean e-commerce landscape in the country while putting an end to malpractices and exploitations.”