Reliance alleges Amazon,Flipkart for violating norms

New Delhi, Apr 09: The Giant company Reliance Retail have alleged that e-commerce giants such as Flipkart and Amazon are in violation of foreign investment rules in the country, according to a report by The Economic Times.

Seeking action against the e-commerce firms, the group of retailers has alleged the online marketplaces are influencing prices on their platforms and illegally funding "abnormal discounts" and are thus in violation of foreign investment norms of the land.

The Retailers Association of India (RAI), in a letter to commerce and industry minister Suresh Prabhu on Saturday said e-commerce marketplaces have found a way to circumvent restrictions placed on such models in Press Note 3 in 2016, through which India spelt out regulations for such operators, the report suggests.

Foreign-funded companies in India, which include Amazon, Flipkart, Shopclues and Snapdeal operate models under which 100 percent foreign investment is allowed only to provide platform to other retailers and vendors to conduct business, as per existing rules.

The letter seen by the newspaper read, "Marketplace operators/technology platform providers have been operating against the spirit of the policy for some time now There is an ambiguity around these guidelines which can be worked around by marketplace operators to overcome the restrictions defined in the B2C ecommerce policy."

"This means that they can continue to operate against the spirit of the policy with no checks and balances," the letter added.

In recent times, smaller vendors as well as smartphone manufacturers have alleged wrongdoing on part of Amazon and Flipkart.