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Goyal flags ‘predatory pricing’ in e-comm

The government has already asked Amazon and Flipkart to reply to a set of questions on their operations, following allegations by brick-and-mortar stores that the etailers have flouted FDI rules, especially during the recently-concluded festive sales.

By: ENS Economic Bureau | New Delhi | Published: November 13, 2019 1:41:51 am
Piyush Goyal has repeatedly called upon etailers to comply with both the letter and the spirit of the FDI rules, cautioning that any deviation could invite government action.

Commerce and Industry Minister Piyush Goyal on Tuesday flagged risks from the “predatory pricing” strategy of some e-commerce players in India, at a key gathering of BRICS ministers and officials in Brazil.

Speaking at a session on ‘Advancing BRICS Trade and Investment Cooperation – the road ahead’ in Brasilia, Goyal said: “I would like to highlight the adverse impact of predatory pricing indulged in by some e-commerce players which adversely impact millions of small retailers. It is important for e-commerce to follow the letter and spirit of the law.”

His statement comes barely a day before his scheduled meeting with US Trade Representative Robert E Lighthizer, aimed at narrowing differences over a limited trade deal that both the countries have been negotiating on for months now. In recent months, the US has expressed concern over India’s FDI rules in e-commerce that ostensibly hit players like Amazon and Walmart-backed Flipkart. The rules clearly bar online marketplaces with foreign investments from offering discounts on products sold on their platforms and also prevent them from owning inventory, except in food retail.

The government has already asked Amazon and Flipkart to reply to a set of questions on their operations, following allegations by brick-and-mortar stores that the etailers have flouted FDI rules, especially during the recently-concluded festive sales. For their part, the etailers have maintained that they have always complied with the FDI rules.

Goyal has repeatedly called upon etailers to comply with both the letter and the spirit of the FDI rules, cautioning that any deviation could invite government action.

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