Govt Cracks Whip On E-Retail Giants

Firms will have to submit audit report every year to show they comply with FDI rules

The government has made it mandatory for e-commerce companies such as Amazon and Walmart-owned Flipkart to submit a report by a statutory auditor every year showing that they are complying with India’s foreign direct investment (FDI) norms.

The move is aimed to ensure that the US tech giants follow all the norms as there have been several complaints from local brick-and-mortar retailers that they have been allegedly indulging in practices such as predatory pricing which violate the country’s FDI norms.

A government notification issued on Thursday states that the e-commerce companies have to obtain a report from a statutory auditor by September-end every year for the preceding financial year confirming compliance of the e-commerce guidelines.

Senior officials said this decision will help in ensuring compliance of FDI policy in the e-commerce sector. The move will raise compliance cost for such companies.