Recent reports have said that Amazon has come under fire for its newest business strategy in India. Local trader groups sued the company because of offering overly discounted prices for their products on the website.
This report comes due to new e-commerce investment rules and regulations that just started taking effect in India last February. It is specifically designed to curtail large online discounts. However, the small traders have complained that bigger companies use complicated business tactics to work around the ordinances while still offering major discounts for their products.
In turn, this issue has become one of the major wedges in New Delhi-Washington trade relations.
In Friday’s open panel discussion, the Confederation of All India Traders expressed their concern about the issue to Amazon’s corporate counsel Rahul Sundaram.
CAIT works to represent 500,000 India based merchants and traders.
Sundaram stood in defense of Amazon, saying that the company was following all the rules and regulations. They continue not to influence online pricing. He added that the company still provides business opportunities for more than 500,000 retailers on the web.
In a counter-statement, a representative from CAIT said that air conditioning units available at about 42,000 rupees in the regular retail market has been available on the website at just 35,000. This Representative then asked what kind of computation they used to warrant such a discount on the website.
Sundaram said that he went shopping at New Delhi markets for air conditioning units and was able to get discounts of up to 6000 rupees. He says that discounting prices is and has been a tradition for many years in the Indian market.
The recent change in the Indian retail regulations last February was followed by many complaints from small retailers and traders, claiming that larger e-commerce companies tend to use their inventory control from affiliated vendors to promote unfair trading practices.
In June, the Indian government warned Amazon as well as Wal-Mart ordering compliance with the new regulations. They said that deep discounting, which can affect smaller shopkeepers, would be prohibited from then on.
Sundaram continues to claim that the company has provided up to 57 warehouses with logistical assistance for smaller business owners. This statement offended the opposing side, saying that they are not small at all.