Indian Cellular Association (ICA) has encouraged the commerce minister Suresh Prabhu to take required actions against e-commerce giants- Flipkart and Amazon for violating foreign direct investment (FDI) rules. These allegations have been put due to the direct and indirect discounts these companies provide on products, especially smartphones. Currently, ICA is handling phone makers such as Apple, Vivo, Lava, Micromax, Nokia, and Motorola
ICA has tried talking with Prabhu regarding this and has said that both these companies are affecting prices of products by holding a large stock. Due to this, revenue and jobs of millions of people in India are at risk and many have lost their work already.
“In the view of the alarming situation that the industry and India are facing, we request urgent and severe action against Amazon India and Flipkart for rampant violations of the conditions of Press Note 3 by both, directly and indirectly, influencing the sale price of mobile phones and other goods,” ICA wrote to Prabhu.”
ICA wrote to the commerce minister.
Amazon denied all the allegations
Amazon has denied all the allegations and a spokesperson said that everything is happening according to the business laws and regulations of India. Also, he revealed that all the prices are determined by the sellers.
On the other hand, Flipkart hasn’t responded to this. Other violations are coming out and one of them is using the foreign capital for proving big discounts. ICA has also said that both these companies are using unethical ways for providing discounts making the small businessman in the country suffer.
What the laws say about this?
According to the laws, e-commerce companies can’t work with an inventory-based model in which products are sold directly to the buyers. These companies can only work as a medium to connect vendors with the customers without influencing prices.
How Flipkart and Amazon India are giving heavy discounts?
It is believed that to make up for the discounts, both Flipkart and Amazon have the support of other companies to divide the loss in a chain-like structure. Buyers are getting attracted to these websites because of the price discounts, equated monthly instalment (EMI) offers, cashbacks they get.
Talking about Amazon, ICA said that the supportive entities are Amazon Seller Services, Amazon Pay, Amazon Wholesale India Pvt. and sellers along with sellers including Green Mobiles, Darshita Electronics, Rocket Commerce, many more.
Flipkart, on the other hand, has entities- Flipkart Internet Pvt Ltd, Ekart Logistics, Flipkart India Pvt Ltd, PhonePe along with sellers such as Retailnet, Omnitech Retail, Trunet Commerce SupreComnet, and India FlashMart, ICA said.
With the help of these intermediates, both Amazon and Flipkart are giving discounts, without having records of these in their own books.
