One of India’s largest trading bodies, the Confederation of All India Traders (CAIT), has asked the government to ban Amazon and Flipkart from offering sales tied to upcoming Indian festivals, arguing that the discounts break the rules for foreign investment in terms of online retail, according to a report by Reuters.
Both Amazon and Flipkart tie sales into important Hindu festivals in the country: Dussehra and Diwali, which both fall in October this year. During these times, Indians typically purchase expensive items like cars and jewelry.
Flipkart is planning a six-day sale that will start on Sept. 29, and Amazon usually has one around the same time. The retailers both promise price cuts on big-ticket items like appliances and smartphones.
In a letter to the federal trade minister on Friday (Sept. 13), CAIT said that by “offering deep discounts” that range from 10 percent to 80 percent on their eCommerce sites, “these companies are clearly influencing the prices and create an uneven level playing field which is in direct contravention of the policy.”
CAIT is a large organization that represents half a million traders and merchants in India. It asked the government to apply a “blanket ban” on those retailers’ sales and also asked for an investigation as to whether the companies were violating foreign direct investment (FDI) rules.
There isn’t likely to be any action on the petition this year, but it could have an effect on future sales.
“We empower our sellers with business insights that allow them to decide the best value for their own products, so they can deliver benefits and savings to consumers and scale their businesses at the same time,” said Rajneesh Kumar, chief corporate affairs officer at Flipkart Group.
Amazon said its 500,000 sellers are made up mostly of small businesses, startups, weavers and artisans.
“Sellers decide the pricing for their products on our marketplace,” a spokeswoman for Amazon said. “They offer their choice of selection to their customers across the country at prices that they deem fit.”