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CAIT Files Complaint Against Flipkart For Violating FDI Guidelines

CAIT Files Complaint Against Flipkart For Violating FDI Guidelines

Traders’ body, The Confederation of All India Traders (CAIT) has filed a complaint to Department of Industrial Policy & Promotion (DIPP), against Flipkart for violation of guidelines on FDI in ecommerce.

In the complaint, addressed to Secretary, DIPP, CAIT has drawn attention to an ad that appeared in newspapers, announcing the sale of an item along with its discounted price to be available only at Flipkart, which is a marketplace.

The said Advertisement violates conditions of the guidelines for FDI in ecommerce spelled out in Press Note No.2 (2016 Series) issued by DIPP on 29.3.2016.

Ecommerce entity offering the marketplace will not ‘directly or indirectly influence the sale price of goods or services’.

CAIT said, the advertisement “clearly contravenes the above provision in as much as it is inviting the consumers to register themselves for purchase of said item at a discounted price at marketplace of M/s.Flipkart, which is bound by the above provision of Press Note No.3 and this act directly or indirectly influence the sale price of goods and also create an uneven level playing field.”

It has urged Secretary, DIPP take a cognizance of this advertisement and has demanded suitable action against the erring entities.

Just yesterday reports emerged that two mutual fund investors of Flipkart have marked down the value of their holdings in the company. The two funds Fidelity Rutland Square Trust II, a mutual fund managed by Fidelity Investments and Valic Co. have marked down their stake in Flipkart by 20%.

The development was first reported by PTI.

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Aparna Mishra

Inc42 Staff

After a 2-year-stint at Ernst & Young, Aparna moved to Journalism. Her prior experience enables her to understand business management. An avid reader and a traveller she hopes to gain insights on the startup ecosystem at Inc42.

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