DPIIT sends queries to Amazon & Flipkart on FDI norms adherence

Amazon and Flipkart have been asked to disclose names of top five sellers on their platform, price list of goods of preferred vendors and the kind of support provided to sellers

NEW DELHI: E-commerce giants Amazon and Flipkart have been asked to disclose names of top five sellers on their platform, price list of goods of preferred vendors and the kind of support provided to sellers, according to sources.

The Department for Promotion of Industry and Internal Trade (DPIIT) in separate questionnaires to these companies have also asked them to share their capital structure, business model and inventory management system.

These questions were sent to them after several complaints were made to the department by traders body CAIT that e-commerce companies have been violating the foreign direct investment policy in garb of mega festive sales.

E-mail queries sent to Amazon and Flipkart on the matter did not elicit any response.

The Confederation of All India Traders (CAIT) have time and again alleged that these companies follow unethical practices by indulging in predatory pricing.

The DPIIT has held several meetings separately with these companies and CAIT members.

Commerce and Industry Minister Piyush Goyal has stated that a probe is on with regard to allegations of predatory pricing against Wal-martowned Flipkart and Amazon.

The detailed questionnaire sent to these companies also includes queries regarding total number of sellers listed on their platforms; list and share of controlled and uncontrolled sellers; distributor and retailer price list for preferred/controlled vendors and proportion of total sales from top five sellers. They have also been asked to share details about association with payment gateways, sources said.

As per the current FDI policy, the government permits 100 per cent FDI in the marketplace model of e-commerce but not in inventory based model.

The online firms are also not allowed to influence directly or indirectly prices of goods to be sold on their platforms.

Both Amazon and Flipkart have maintained that they follow the current FDI policy.

The companies also strongly deny having indulged in deep discounting, saying brands offer those discounts.

According to consulting firm Redseer, e-commerce companies such as Flipkart and Amazon could generate up to $6 billion or Rs 39,000 crore in sales this festive season.