Retailers' Association files case against Amazon.in

The Retail Association of India (RAI) has accused Amazon.in for violating foreign investment laws by offering gift vouchers to its customers.
The Retail Association of India

In a recent announcement, the Retailer Association of India (RAI) has filed a case against online retailer Amazon.in saying that the eCommerce company has violated India’s Foreign Direct Investment (FDI) norms.
RAI has accused Amazon of violating foreign investment laws by offering gift vouchers to its customers. As per the FDI norms in the country, B2B e-commerce companies in India are allowed foreign capital investment, but investing in B2C e-commerce companies is not allowed.
Amazon recently announced Rs 200 gift cards to Indian customers who shopped for above Rs 500, in a bid to thank its customers after the website was named the most-visited e-commerce website in the country only two and a half years after its entry into the country.
While the Rs 200 gift card offer was welcomed by customers, it has irked the Retailers Association, prompting it to complain to the government.
Most e-commerce websites that have foreign investments claim that they are merely a network orchestrator, acting as a medium or a platform between small sellers and consumers, which means it is a business-to-business model.
Mentioning the Rs 200 offer by Amazon, RAI wrote a letter to secretary of Department of Industrial Policy & Promotion (DIPP) Amitabh Kant saying “such transfer of cash value to end-costumers, which incentivised end-consumers to shop on a website – does this pass the test of B2B business transaction even when cash is directly being offered to retail customers.”
Traditional retailers in the recent past have been aggressively attacking on the eCommerce businesses which are scaling with phenomenal figures in the country. The Delhi court in November had ordered check on 21 eCommerce companies to check whether they are following FDI norms or not.

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