The Confederation of All India Traders is urging the government to enforce a ban on Amazon.com Inc.'s and Flipkart Online Services Pvt. Ltd.'s upcoming festive season sales saying they violate India's new foreign investment rules due to their deep discounting practices that hurt small traders, Reuters reported Sept. 13, citing the trader's body's letter to Minister of Commerce and Industry Piyush Goyal.
The Seattle-based retail giant's Indian unit and the Walmart Inc.-owned e-commerce retailer hold sales ahead of the Hindu festivals of Dussehra and Diwali, the report said. Flipkart's sale is scheduled to start Sept. 29 and end Oct. 4, while Amazon has not yet announced the dates for its annual sale.
"By offering deep discounts ranging from 10% to 80% 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 policy [on foreign investment]," the industry association wrote in its letter, according to Reuters.
The trade body, which represents 500,000 members and traders in India, is also reportedly seeking a "blanket ban" on sales promoting heavy discounts and is asking the government to investigate the potential violation of foreign investment norms by these big players.
The news comes after both Amazon and Flipkart as well as other big e-commerce players were warned by Goyal amid competition concerns, after small traders accused the companies of bypassing federal rules through their complex business structures, according to media reports.
Amazon and Flipkart did not immediately respond to S&P Global Market Intelligence's request for comment.
