DPIIT sends complaints by trader body CAIT against Flipkart, Amazon to ED

The Confederation of All India Traders’ complaints against e-commerce giants Flipkart and Amazon have been forwarded by the Department for Promotion of Industry and Internal Trade (DPIIT) to the Enforcement Directorate and the Reserve Bank of India “for necessary action.”

DPIIT forwarded four complaints by the traders’ body to the two agencies saying CAIT had alleged that e-commerce companies were in violation of the Foreign Exchange Management Act (FEMA) rules and FDI policy by adopting illegal structuring/investments and practices.

The complaints pertain to alleged violation of foreign direct investment (FDI) policy in the deal between Flipkart and Aditya Birla Group, violation of FDI policy related to manufacturing which is being used for multi-brand retailing by various e-commerce companies, violation of the FEMA and its rules by Amazon, and the “blatant violation” of FEMA and FDI policy by Amazon and Flipkart and exploitation of loopholes by them.


“The ED and the RBI are hereby requested to take necessary action,” the DPIIT said in the letter dated December 22.

CAIT Secretary General Praveen Khandelwal said every effort will be made in 2021 to clean up the e-commerce landscape and end an era of manipulations, malpractices and exploitation.

“CAIT will promote and encourage traders across the country to adopt digital commerce and digital payments as new instruments to widen business in India,” Khandelwal said.

The two e-commerce majors were issued notices in October by the consumer affairs ministry for not displaying the mandatory declarations, including ‘country of origin’, which digital platforms ought to follow as prescribed under the Legal Metrology (Packaged Commodities) Rules, 2011.

They were asked to furnish details about sellers on the platform and necessary incorporation documents.