In response to a question in the Rajya Sabha, Union Minister of State for Commerce and Industry Som Prakash said that no investigation has been initiated by the RBI or the Enforcement Directorate in this matter. The DPIIT’s letter referred to the Confederation of All India Treaders (CAIT) allegations that FDI policy in manufacturing was being misused by major players of FDI for multi-brand retailing of grocery. There have also been complaints against Amazon for various violations of the Foreign Exchange Management Act, 1999.
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Kat has made these allegations
CAIT had alleged that Flipkart had a clear intention to make ABFRL a preferred seller on its market, citing a violation of FDI policy in the deal. The Confederation argued that FDI policy would allow a foreign company with any type of equity interests in sellers on its brandplace platform or directly or indirectly through side agreements to enter into their inventory or any type of multi-brand retail trading Prohibits doing.
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ABFRL announced to sell stake in Flipkart
In October 2020, Aditya Birla Fashion and Retail (ABFRL) announced the sale of a 7.8 per cent equity stake in the Flipkart Group, which was approved by the Competition Commission in January. ABFRL manufactures and sells apparels, accessories and footwear through multiple formats including retail and department stores, multi-brand outlets, e-commerce. Som Prakash said in the Upper House of Parliament that CAIT is complaining about the biased policy of banks for purchases made from e-commerce websites. In November 2020, Amazon, the bank offering cashback and rebate on the purchase of e-commerce from Flipkart, was pushing for infringement of fundamental rights of merchants and consumers. Kat accused Banks of forming a cartel with Amazon and Flipkart to promote inappropriate behavior.