New Delhi, Sep 17 (KNN) The Confederation of All India Traders (CAIT) on Tuesday refuted the statement of Amazon and Flipkart appearing in the media about holding festive season sales in coming days on their e-commerce portals.

"CAIT strongly condemn and said that holding such sales and offering deep discounts are clear violation of FDI policy," it said adding that the CAIT had earlier written to Union Commerce Minister Piyush Goyal to ban the declared festival sales by these e commerce portals.

‘’CAIT strongly opposed the statements of Amazon and Flipkart that appears in media couple of days back that they empower the sellers on their respective platforms to decide the prices and offer their choice of selection to customers at the prices they deem fit and offer best value of their products to consumers,’’ Khandelwal said at a press conference here on Tuesday.

"The said statement of both the Companies are devoid of any logic and just an eye wash to keep right the wrong practices they are conducting on their platform,’’ he added.

Khandelwal said that these companies are indulging into blatant violation of FDI Policy of the Government which has very well defined the role of e commerce entities and there is no ambiguity at all.

‘’The key provisions of FDI policy says that 100% FDI is allowed in e commerce marketplace model and under which e commerce companies can act as only technical platform. It further states that such e commerce companies will engage only in Business to Business (B2B) and not in Business to Consumers (B2C) activities on their platform and cannot hold inventory. Further, the policy clearly says that e commerce entities will not influence the prices directly or indirectly and shall maintain level playing field,’’ Khandelwal reminded.

Khandelwal while strongly refuting the statement by both these e-commerce portals, said that when they are allowed only for B2B business than what is the need of organising festive sales, indulging into big advertisement campaign attracting consumers.

‘’B2B sales means sellers registered on their platform will sell their goods only to business entities and not to any consumer whereas in their case the entire business activities are between business to consumers which is a violation of the policy. Since, these e commerce companies are not owners of the inventory how can they offer deep discounts on the inventory hold by the sellers registered on their platform. As per policy, it should be the seller offering discounts but in this case the discounts are offered by E commerce companies which is again violation of E commerce policy. Such festive sales offering deep discounts are nothing but influencing the prices directly or indirectly which is a clear violation of the policy,’’ he asserted.

Khandelwal further said that if these companies are so transparent and law abiding they should declare the names of first 10 sellers on their platform since last 5 years out of 100,000 sellers registered on Flipkart and 500,000 sellers registered on Amazon. It will be found that same set of entities are selling almost 80% of the goods and that too consumers and not business entities.

The rest of the sellers are mute spectators and do not find any opportunity of doing business on these platforms which shows that these companies have direct control over the supplies, prices and inventory which is a blatant violation of the policy. It is not the sellers but the e commerce companies which decide the prices. Their offering deep discounts and earning losses are funded by their respective investors to enhance the valuation of the Company. So ultimately it is the valuation game in e commerce and not a platform for selling goods.

The CAIT has also urged the Union Commerce Minister to immediately look in to the blatant violation of the FDI policy of the Government by these e commerce companies and impose a ban on declared festival sales.