New Delhi, Nov 4 (IANS) The Confederation of All India Traders (CAIT) has accused e-commerce major Amazon of violation of rules under the Foreign Exchange Management Act (FEMA).
In a letter to Commerce and Industry Minister Piyush Goyal, the traders’ body blamed that e-commerce major of not seeking the Centre’s approval for entering the multi-brand retail space in India.
According to CAIT, Amazon has invested in retail chains and has been indirectly active in the multi-brand retail segment.
“We have no doubt that if Amazon had complied with the law and sought the prior permission of the Government of India to enter the MBRT (multi-brand retail) sector, such entry, even if allowed, would have been made subject to numerous restrictions tailored to ensure that Amazon is not permitted to engage in monopolistic or anti-competitive activity and grow its business at the cost of the domestic Indian retail sector,” the letter said.
“It is for precisely this reason that Amazon has sought to mask its entry into India in the MBRT sector and operate free of any such restrictions by adopting the steps that we are describing below,” it added.
CAIT Secretary General, Praveen Khandelwal, in a media briefing, on Wednesday alleged that that although documents available in the public domain show that Amazon has made investment of about Rs 35,000 crore in Amazon India platform but in reality, is indirectly carrying multi-brand retail business, with investment of about Rs 4,200 crore in More Retail Ltd (a multi-brand retail company) and has investment of about Rs 1,430 crore in Future Coupons Private Ltd, but is actually a controlling investment in Future Retail Ltd (a multi-brand retail company).
“All the above investments are in violation of FEMA Rules and Regulations and we call upon the government to take immediate action,” Khandelwal said.
The allegations come at a time when Amazon is in a legal battle with Future Retail in a bid to thwart the proposed the buyout of the latter by Reliance Retail Ventures Ltd.
An Amazon spokesperson said: “As a responsible investor and a long term player in India, Amazon complies with Foreign Direct Investment laws and seeks regulatory approvals including from the Competition Commission of India. Our investment in Future and all investments in India are in compliance with applicable regulations.”