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Reliance Retail bypasses foreign investment norms for government e-commerce players

Billionaire Mukesh Ambani’s Reliance told the government on Thursday that complex legal structures have been used by some firms to circumvent the country’s e-commerce rules that do not allow foreign capital in inventory-based models from the outset Huh.

In a meeting of the Commerce Ministry, sources said, over allegations that foreign online retailers had built complex structures to circumvent foreign investment rules and harm small traders, Amazon urged the government to provide any clarification until then Do not issue until the investigation of its business practices is over.

At the meeting, representatives of Reliance stated that foreign investment is allowed only in pure technical infrastructure / platform, which facilitates buyer meeting with sellers.

Such platforms themselves cannot act directly or indirectly as vendors, adding some foreign companies have used complex legal structures that violate the policy or use constructive interpretation of the policy that violates the policy We do.

He said that such legal creativity involves creating a multi-tiered company structure to hide the real relationship between the marketplace entity and the vendors.

According to sources, he alleged that these market entities are under the control of inventory and are their biggest sellers.

The ongoing breach raises doubts about the legal sanctity of the policy, especially in the minds of new e-commerce players and therefore it is imperative that the rules be clarified to an extent that they are not subject to such constructive interpretation, Officials told the meeting.

Sources said they suggested that the scope of the group’s company be widened to include affiliates and affiliates, and to either control inventory by misusing B2B e-commerce or select vendors through capital dumping Deep relaxation should be provided through.

On the other hand, Amazon officials said that any clarification in the FDI policy would affect unemployment, ridicule of India’s foreign investment policy, and consumers.

He said that any claims or complaints of violation can be investigated by the agencies concerned and hence no explanation has been found so far.

Reached for comments, an Amazon spokesperson welcomed the opportunity for industry consultations initiated by DPIIT and constructive and sustained dialogue with the government.

“We reiterated our strong, long- commitment to India, as we continue to build thousands of MSMEs in and technology to empower and grow these local businesses,” the spokesperson said.

“FDI policy needs to be stable and predictable for investor confidence as any disruption to business will affect millions of livelihoods and employment, with negative consequences on downstream suppliers and service providers including MSMEs, startups and offline stores that barefoot back Have come. COVID, ”the spokesperson said.

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