Swadeshi Jagran Manch

15th Rashtriya Sabha, Gwalior

(24-26 December 2021)

Resolution-3

Withdraw Permissions to Amazon, FlipKart-Walmart to Operate in Bharat

Foreign Direct Investment in multi-brand retail trade is regulated through Foreign Direct Investment (FDI) Policy. Foreign players cannot have inventory based model and they also based from influencing prices by cash burning models. Multinational e-commerce companies such as Amazon and Walmart/Flipkart blatantly contravening and operating uncontrolled in India.

Its well known that Amazon and Flipkart hold 80% of online space. Discounts offered by them are adversely impacting offline markets also. They are luring customers by offering high discounts, advertising aggressively to communicate such offers to the general public. Public is attracted to them more for discount than the convenience. This trend is adversely impacting the neighborhood shops and kirana stores. Along with this, people engaged in wholesale and transport sector are also getting adversity affected by e-commerce giants.

For a long times there was a demand that the e-commerce companies who are illegally doing e-commerce business under the guise of the platform in India by giving huge discounts on the basis of foreign funds i.e. on the basis of 'cash burning model', capturing the markets, be compelled to audit their financial documents and make them public. But these companies avoided making their documents public.

Amazon gives preferential treatment to selected group of sellers including Cloudtail and Appario to hurt small retailers bypassing Indian FDI Regulations. Amazon scooped up data from its own sellers to launch competitive products and brands such as Solimo and Amazon Basics. Amazon Web Services (AWS) is another operations being carried by Amazon in India to exploit the retailers by charging very heavy fees in the garb of helping them in improving their presence on e-market place.

Amazon compels small suppliers to hold substantial minimum quantity of their range of products at its fulfilment centres. These suppliers are also required to pay for the warehousing, transportation etc. It has resulted in very high inventory cost for vendors.

Amazon in India has became so powerful that it can pick winners or losers, destroy small businesses, raise prices on consumers and put employees out of work. Working conditions for workers are the worst in fulfilment centres (warehouses) where they are forced to work for long hours without reasonable rest.

Amazon and other giants in e-commerce claims that it is creating jobs. But it does not tell that every one job it creates, it is destroying ten other jobs. It is obvious, as it is at the forefront of automating retail trade. Apart from that they adopt several factices to push people art of conventional business. Its notable that is the past few years mobile shops have been closed due to unfair trade practices of their e-commerce giants.

Amazon meets with startups with the proposal to invest, then launches competing products which is highly detrimental to growth of those startups as well as culture of entrepreneurship in the country.

Amazon is on spree to acquire brick and mortar retail outlets alongwith its e-commerce retail activities. Its investment in Shoppers Stop and More Retail chain are some major steps in this direction.

From 2017-18 to 2019-20, just in three years, Amazon has spent 9,788 crores on legal and professional fees in India. Internal sources only exposed that the money is being routed through these accounts for bribing officials in India.

Payment of bribes by way of legal and commercial fees is no new method. The only difference is that in today's time its magnitude has increased significantly. Amazon Company has hired many law firms for its legal business activities. Amazon company pays huge legal fees to these law companies, and after that these companies transfer that fee to some other company and after that a link is formed and finally the final legal company or lawyer or any professional withdraws the amount in cash to the concerned official. This work is done so efficiently that there is no case for outright bribery by the company.

It has to be understood that this is a very serious matter. This also proves that all licenses and permissions obtained by such companies were obtained fraudulently using unfair means. 

This Rashtriya Sabha of Swadeshi Jagran Manch demands that: 

• All the permissions given to these companies be withdrawn forthwith and all their activities be declared illegal.
• The entire matter should be investigated by the CBI and as soon as there is a trace of the government officers including people sitting in the high offices, gaining from these companies, directly or indirectly, they should be sent on leave to facilitate fair investigation of the whole matter; and be punished for their offences.