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May 21, 2021

CAIT accuses Flipkart of FDI and taxation violations

CAIT has urged the Indian Government to investigate Flipkart for allegedly violating FDI and taxation rules.

The Confederation of All India Traders (CAIT) has reportedly urged the Indian Government to launch an investigation against Walmart-owned e-commerce retailer Flipkart.

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The traders’ body has accused Flipkart of violating the country’s Foreign Direct Investment (FDI) norms and taxation rules.

According to CAIT, Flipkart has restructured its business model in such a way as to allow it to manipulate inventory and retail prices.

In its letter to Indian Commerce and Industry Minister Piyush Goyal, the trade body said that Flipkart was breaching the FDI policy by “creatively structuring its marketplace business model and creating a facade in order to exercise control over inventory and retail prices, a practice expressly prohibited by the FDI Policy on e-commerce”.

CAIT added: “Flipkart has created a system of surrogate business partners with the sole aim of bypassing the FDI Policy and destroying the very traders the policy aims to protect.”

The body has demanded stern action against the retailer from the government, including tax authorities.

A Flipkart spokesperson was quoted by PTI as saying: “We will continue to operate with the same transparency, in line with India’s FDI and regulatory framework, while creating new livelihood opportunities and jobs.

“With more than three lakh sellers on the Flipkart Marketplace, our seller partners are an integral part of the ecosystem.”

In March, CAIT and another trade body, the Retailers Association of India (RAI), urged the government to create a regulatory body for e-commerce.

The trade bodies made the request during a meeting with the Department for Promotion of Industry and Internal Trade (DPIIT).

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How attractive are current investment opportunities in Europe?

Europe has been identified as one of the most favorable regions for investors, seeing high investment activity in the past year. Most of these investments have been through Debt Offering, valued at close to $700 billion. The region has provided attractive investments in a diverse set of companies. Companies who tend to major themes such Digital Media, Cloud, Artificial Intelligence, E-commerce, and Big Data are recording the highest number of deals, with Digital Media recording close to 2,000 deals. However, GlobalData’s whitepaper offers a full view of the market, analyzing less successful or attractive points of investment as well, examining statistics on Equity Offering investments and PE/VC deals. Understand how government agencies for economies around the world use GlobalData Explorer to:  
  • Track the M&A and Capital Raising volumes into their target market
  • Identify the top sectors in the target market attracting the investments
  • For any investment segment, identify the top Investors inside and outside the target economy that are already investing in the Segment
  • Assess and showcase the growth potential for various Industries in the target economy
Don’t miss out on key market insights that can help optimize your next investment – read the report now.
by GlobalData
Enter your details here to receive your free Report.