RBI administers FDI policy; ED enforcing authority: DIPP to CAIT

NEW DELHI: With traders body CAIT alleging violation of foreign direct investment norms in the e-commerce sector by Flipkart and Paytm, the DIPP today said it is the RBI that "administers" the FDI policy and ED which is the "enforcing authority".

The Department of Industrial Policy and Promotion (DIPP), in a reply to the tweet of CAIT, said that it is responsible only for formulation of FDI policy which is notified under Foreign Exchange Management Act ( FEMA).

"FDI policy violation part of penal provisions of FEMA. RBI administers and ED is its enforcement authority of FEMA," DIPP said in a tweet.

CAIT Secretary General Praveen Khandelwal in a tweet has said that the department needs to be straightforward in the issue of e-commerce FDI.

"Why keep eye closed on violation by Paytm and Flipkart etc," CAIT has said in its tweet.

Confederation of All India Traders (CAIT) has demanded that the government should fix the loopholes and provide a level-playing field to small retailers.

All India Online Vendors Association (AIOVA) has recently tweeted that "Paytm isn't giving cashbacks against new FDI policy (influence of pricing directly on indirectly)".

The DIPP has replied to this that giving discount or not is prerogative of the seller owning inventory.

To one of the tweets by a twiterrati, the department has clarified that the FDI policy provides that e-commerce marketplace will not directly or indirectly influence the sale price of goods and services.

Since the release of the guidelines by the DIPP on FDI in e-commerce, brick and mortar stores are raising concerns over the discounts announced by the marketplace companies.