New Delhi: A leading group of Indian retailers has urged the government to ban the local operations of Amazon.com. The move came after ‘Reuters’ reported that the US e-commerce giant has for years given preferential treatment to a small group of sellers on its India platform. Amazon.com has used them to circumvent India’s strict foreign investment regulations.
The report is based on internal Amazon documents dated between 2012 and 2019. It provided an inside look at the cat-and-mouse game Amazon has played with India’s government. In the process it has adjusted its corporate structures each time the government imposed new restrictions aimed at protecting small traders.
The Confederation of All India Traders (CAIT) has issued a statement regarding this development. It said it represents 80 million retail stores in India. It said in the statement that ‘the shocking revelations’ are ‘sufficient enough to immediately ban operations of Amazon in India’.
The group called has on Commerce Minister Piyush Goyal to take immediate note of this ‘important and burning issue’. It has asked Goyal to order a ban on operations of Amazon in India’.
Amazon did not respond to a request for comment on the trader group’s statement. But shortly after CAIT issued its call for the ban, Amazon retweeted the report. It criticised the report as ‘unsubstantiated, incomplete, factually incorrect’, without going into specifics. It added, ‘Amazon remains compliant with Indian laws’.
“In the last several years, there have been (a) number of changes in regulations. Amazon has on each occasion taken rapid action to ensure compliance. The story therefore seems to have outdated information and doesn’t show any non-compliance,” Amazon said on its Amazon India News Twitter account.
The Amazon documents revealed the e-commerce company helped a small number of sellers in India prosper. It gave them discounts on fees, and helped one cut special deals with big tech manufacturers such as Apple Inc. The company exercised significant control over the inventory of some of the biggest sellers on Amazon.in, the documents showed. Government rules announced in 2016 required that an e-commerce platform should ‘not exercise ownership’ over sellers’ inventory. Amazon pledges that all sellers operate independently on its platform.
Amazon has been facing increasing scrutiny by Indian regulators, and the detailed look inside its strategy could deepen the risks for the company in one of its key growth markets. Indian retailers, who are a crucial part of Prime Minister Narendra Modi’s support base, have long alleged that Amazon’s platform largely benefits a few big sellers and that the e-commerce company engages in predatory pricing that harms their businesses.