CAIT accuses Amazon of misusing FDI policy for conducting multi-brand retail

The Confederation of All India Traders (CAIT) has written to Union Commerce Minister Piyush Goyal, charging Amazon and other e-commerce portals of misusing the provisions of FDI policy and conducting multi-brand retail in the grocery sector which is otherwise prohibited.

The CAIT while drawing the attention of Goyal towards various clauses has urged that in view of various disparities and anomalies, there is an urgent need to redraft the press note to make intentions of the government more clear leaving no scope for the e-commerce portals to manipulate the provisions of the press note to their comforts.

CAIT national president B C Bhartia and secretary general Praveen Khandelwal said Press Note two of 2018 of the FDI policy which not only prohibits the foreign investments in multi-brand retail but also prohibits the foreign owned or controlled e-commerce marketplace entity to have any control over the inventories of the sellers on its platform is being misused by Amazon through its Amazon Pantry & Cloud-tail Pantry for indulging in the “inventory model of e-commerce” for grocery retail though FDI policy allows only the manufacturers to sell their own manufactured and processed ready to eat goods in case of food products and not the aggregator of grocery.

Bhartia and Khandelwal further added food products and groceries constitutes a major portfolio of business to consumer retail trade, therefore, allowing them to carry out retail trading and inventory-based e-commerce in food product retailing would defeat the very purpose of banning foreign companies from multi-brand retailing.

Therefore, the CAIT has demanded that food products should be carried under retail trade and to remove all kinds of manipulations and disparities, a new Press Note should be issued leaving no scope for foreign funded e-commerce portal to conduct business under inventory mode.