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Are e-commerce websites violating FDI policies – Delhi HC issues notice in plea by shoe retailers

Smrithi Suresh

The Delhi High Court today issued notice to the Union over a petition alleging the violation of the government’s FDI policy by e-commerce majors.

A Single Bench of Justice RS Endlaw sought a reply from the Government over a petition filed by the All India Footwear Manufacturers and Retailers Association. The petition had sought directions from the Delhi High Court to initiate investigations into e-commerce websites selling footwear. Senior Counsel Abhishek Manu Singhvi appeared for the Petitioner.

The plea, a copy of which is with Bar & Bench, states that the websites were doing business through the internet as “Online Stores”, which was in “complete violation” of the FDI Policy.

“These entities are evading the law by creating a complex and convulated business structure by creating a facade of a market place model…

….the E-commerce entities are taking undue advantage of the footwear retailers and manufacturers present in the physical world as they are giving discounts on the very products being sold by the members of the Petitioner Association which leads a consumer to only utilize the Petitioner’s shop as footwear trial room or showrooms.

…thus the FDI illegally gotten by the E-commerce entities is being misused by them through websites to warp the level playing field in direct violation of Article 21 of the Constitution of India.”

The petition impleaded the ED, RBI, Dept of Industrial Policy & Promotion, Ministry of Finance and the Ministry of Corporate Affairs as Respondents.

The matter will now be heard on October 14.

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