Minister of Commerce, Government of India, Piyush Goyal has once again targeted online marketplaces, instructing e-commerce platforms to adhere to foreign direct investment (FDI) regulations.
E-commerce company should respect law of land – Piyush Goyal
According to PTI, “The law of the land is very clear about foreign direct investment…I have been repeatedly talking about the subject that every ecommerce company should respect the law of the land both (in) the letter and spirit,” Goyal said.
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He mentioned that the country’s FDI rules are clear for ecommerce players, adding, “If you read today’s papers, it opens up a lot of people to question.” His comments coincided with reports claiming that the Enforcement Directorate (ED) had found “direct links” between Amazon, Flipkart, and their preferred sellers.
A few months ago, Goyal criticised Amazon for alleged predatory pricing. He also claimed that Amazon’s plans to invest billions in India are merely to cover its losses, rather than to provide significant services or investments to benefit the Indian economy.
On the very next day, Goyal specifies that the government isn’t against online marketplaces but wants them to follow the rules. His comments come as the government continues its crackdown on ecommerce platforms.
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ED seeks probe into Amazon & Flipkart
Earlier this month, the ED searched some of the main vendors of Amazon and Flipkart as part of an investigation into FDI norm violations.
Notably, a total of 19 locations linked to these “preferred” sellers were searched in Delhi, Gurugram, Panchkula, Hyderabad, and Bengaluru. Additionally, in September 2024, the Competition Commission of India (CCI) reportedly found Amazon and Walmart-backed Flipkart guilty of breaking competition laws. The CCI’s internal report indicated that both ecommerce platforms violated antitrust rules by favouring certain sellers on their platforms.
After the findings, one of Amazon’s former major sellers, Appario Retail, challenged them in the Karnataka High Court in September. The court then heard three similar petitions from other sellers and put a temporary hold on the CCI’s actions until November 20. Besides, over a dozen sellers from Amazon and Flipkart have filed petitions in the High Courts of Karnataka, Telangana, Madras, and Kolkata, challenging the CCI’s investigation report.
Recently, reports emerged that the Competition Commission of India (CCI) plans to take the antitrust case against Amazon and Flipkart to the Supreme Court. This move follows a letter from the Confederation of All India Traders (CAIT) to the central government. The letter accused the two ecommerce giants of violating FDI rules and harming small brick-and-mortar stores through deep-discounting tactics.
