Just a couple of days after Flipkart announced the dates of its "The Big Billion Days" sale, the Confederation of All India Traders (CAIT) on Friday wrote to the government seeking a "blanket ban" on festive season sales conducted by the e-commerce giant as well as its rival Amazon and other such platforms.
While Flipkart announced that its annual six-day sale ahead of Diwali and Dussehra would take place starting 29 September. And interestingly, Amazon is also hosting its annual festival sales from the same date as its rival.
During these periods, the e-commerce platforms offer heavy discounts to lure customers as Indians tend to make major purchases during the festive season.
CAIT said that the practice of deep discounts offered by various e-commerce platforms during the festive season goes against the foreign direct investment rules.
By offering deep discounts ranging from 10 per cent to 80 per cent on their e-commerce portals, these companies are clearly influencing the prices and create an uneven level playing field which is in direct contravention of the policyConfederation of All India Traders (CAIT) letter to Piyush Goyal, Commerce and Industry Minister
The traders body argued that that as these e-commerce platforms are "openly flouting FDI norms, a blanket ban on such festival sales should be ordered and an investigation should be conducted as to how these companies are flouting FDI norms and accordingly action should be taken against them."
"...much contrary to the FDI policy, the e-commerce portals are deeply engaged in B2C business and the quantum of B2B business is almost negligible," CAIT, which represents 500,000 merchants and traders in India, said in its letter on Friday.
"As per FDI policy, e-commerce entities providing marketplace will not directly or indirectly influence the sale price of goods and services and shall maintain level playing field."
Flipkart, in its announcement of annual sales dates said that "affordability is one of the key pillars for the Big Billion Days, with a focus on empowering consumers to fulfill all their shopping aspirations without compromising on their budgets."
The Walmart-owned online giant is luring consumers with attractive payment options like cardless credit, Flipkart Pay Later and No-cost EMI among others.
(At The Quint, we are answerable only to our audience. Play an active role in shaping our journalism by becoming a member. Because the truth is worth it.)