Amazon, Flipkart May Face Cap on Online Smartphone Sales

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Amazon Flipkart

NEW DELHI (Reuters) – A group of Indian companies representing 150,000 cell phone stores on Monday commended Prime Minister Narendra Modi to review Amazon companies’ practices and set a daily limit on total smartphone sales by a single online vendor.

In a letter to Modi, the group cited a special report released by Reuters last month that said Amazon has for years given preferential treatment to a small group of vendors on its Indian platform, using them to evade the country’s strict laws on offshore financing.

“We are aware of Amazon’s mindset and practices,” the Indian Mobile Phone Retailers Association (AIMRA) wrote in a letter. The letter states that “Amazon has exposed its business practices in India and has been cunningly evasive to regulators and politicians.”

AIMRA

AIMRA urged the Union government to “put on hold all Amazon operations in India” until an investigation into its activities is conducted. Amazon said it would not give preferential treatment to any supplier in its market and always comply with Indian law.

Amazon and Modi’s workplace did not respond immediately to a contact request on Monday. Both companies, which operate India’s largest e-commerce platform,2 denied the allegations. In a letter to AIM, the company said it received a copy of a letter sent to AIM’s CEO, Suresh Gupta.

Limit by the federal government

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In its letter, AIMRA stated that the federal government should limit smartphones’ total sale by a single vendor on Amazon and Flipkart to Rs. 500,000 ($6,829) per day.

The group also accused U.S. companies of promoting gross sales on the platform as the most popular sellers and asked the Union government to review partnerships between smartphone manufacturers and these vendors.

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Flipkart did not answer back to a request for comments. In a specific report released last month, Amazon said in a press release that it targeted small businesses in India and that it was “treating all vendors in a good, clear and non-discriminatory manner.”

The retailer mentioned that it is battling technology giants as smartphone sales increase online. According to Forrester’s analysis, 44% of India’s smartphones will be purchased online by 2019, with Amazon and Flipkart dominating total sales.

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