Flouting FDI norms? DPIIT calls on Amazon, Flipkart

The Department for Promotion of Industry and Internal Trade (DPIIT) on October 10 met representatives of Amazon and Flipkart to discuss the issue of potential flouting of foreign direct investment norms by the two companies during their respective sale festivals.

The development comes in the wake of DPIIT receiving a complaint from Confederation of All India Traders claiming that the e-commerce companies indulged in predatory pricing, deep discounting, and exclusivity of various products, which is not allowed under the FDI policy.

Guruprasad Mohapatra, Secretary, DPIIT and Shailendra Singh, Additional Secretary, DPIIT, chaired the meeting. The first meeting took place with Amazon during the afternoon, which was followed by a separate meeting with Flipkart.

"We had open & transparent discussion with DPIIT officials. We thank the Government and particularly Ministry of Commerce and Industry for the opportunity and we are always available for further engagement as needed," an Amazon spokesperson told Moneycontrol.

Flipkart did not comment on the development.

The six-day festival, which saw participation from multiple other online marketplaces apart from Amazon and Flipkart, is learnt to have generated a total gross merchandise value of $3 billion.

This is a 30 percent year-on-year growth compared to the first festive sale event, with significant share coming from customers in tier-II cities and beyond.

Research agencies expect the total GMV during the month of October to be in the range of $6-7 billion.