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Are Flipkart, Amazon violating FDI Rules?

The new pertinent question that is presently making rounds in the cellular market is whether e-commerce giants Amazon and Flipkart are violating FDI norms or not. It has come to knowledge recently that the Indian Cellular Association (ICA), the handset makers’ lobby, has written to Mr Suresh Prabhu, Commerce Prabhu with a similar allegation on grounds that both the companies offer discounts, both by direct as well as indirect means on various products, including mobile phones. This they allegedly do through intermediaries or other companies in partnership with them, as reported by the Economic Times.

On this note, a meeting has also taken place between the ICA and Mr Prabhu where the former has provided ample explanations backing their allegation. As per their statement, companies like Amazon and Flipkart may be circumventing the rules under Press Note 3 on FDI. It has also been alleged that this has been done by means of holding the inventory and in the process, influencing the prices of electronic items. This reportedly dampens the value of the revenue, as far as the offline retailers are concerned. It also has adverse effects on the jobs of a huge number of people. Taking all into view, it is still just a matter of waiting till further facts of the issue are revealed and the truth comes to light.

Source: Timesnownews

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