CAIT says ecommerce firms flouting FDI norms

Traders body CAIT has said that the e-commerce companies such as Amazon, Flipkart, Snapdeal and others are continuing with their deep discount strategies despite making losses and still have no regrets. In another statement a couple of days ago, the traders' body had filed a complaint with the Commerce Ministry alleging these ecommerce companies of flouting FDI norms.

“These Companies have received FDI in their respective business and as per government policy are entitled to do only business to business (B2B) activities but keeping aside the law, these companies are openly selling goods to consumers just below the nose of the government. Unfortunately, the government has kept the eyes closed," said B. C. Bhartia, National President and Praveen Khandelwal, Secretary General of CAIT in a joint press statement.

Questioning the established mathematics of Indian economy which talks about the sustainability of a business 'only' when it earns profits, the release shares the registered losses of Flipkart for the year 2012/13 as Rs 340 crores which rose to Rs 719 crores in 2013/14, whereas Snapdeal stands at Rs 120 crores losses in 2012/13 which swelled at Rs 270 crores in 2013/14.

Both Bhartia and Khandelwal said that it is a matter of great surprise that since last one year CAIT is demanding investigation into the business model of ecommerce companies but the government is tight lipped and no response has been received. They also informed that since Secretary, DIPP has not given any response, they are left with the option to approach finance minister and commerce minister and will demand their immediate intervention or will go to the court.