Connect with us


Amazon: Evaluating Government Fine And Its Implications On FDI Norms



Amazon: Evaluating Government Fine And Its Implications On FDI Norms

The Central Government has imposed a penalty of Rs 75,000 on Amazon, an e-commerce giant, for not displaying mandatory information which includes the country of origin of the products sold on its platform, according to an official order. The Consumer Affairs Ministry had issued notices to e-commerce majors Flipkart and Amazon for not displaying such crucial information, in October. The ministry had also asked the states to ensure that all e-commerce firms comply with the Legal Metrology Rules, which is for packaged commodities.

Reasons for imposing penalty on Amazon

According to the order issued by the Ministry on November 19, Amazon failed to give a satisfactory reply to the notice.

“If you are willing to close the matter departmentally, you can compound the case as per section 48(1) of the Act on payment for credit to the government an amount of Rs 25,000 each on behalf of each director plus Rs 25,000 on behalf of the company,” the legal metrology department wrote to Amazon Seller Services last week.

The fine imposed on Bengaluru-based Amazon Seller Services and all the directors is as per the provisions of the Legal Metrology Act, 2009 and the Legal Metrology (Package Commodities) Rules, 2011.

The official added that Flipkart had not been fined yet. An email that was sent to Amazon on the matter did not bring out any immediate response. In the notice that was issued last month by the consumer affairs ministry, it was said, “It has been brought into notice that some of the e-commerce entities are not displaying the mandatory declaration on digital platforms required under the Legal Metrology (Packaged Commodities) Rules, 2011.”

In similar notices, the ministry had mentioned that Flipkart India Pvt Ltd and Amazon Development Centre India Pvt Ltd need to ensure that all mandatory decelerations are displayed on the digital and electronic network used for these e-commerce transactions. This is a first penalty that the government imposed under The Legal Metrology (Packaged Commodity) Rules, that came into effect in January 2018.

The Metrology department also added in the notice to Amazon that in case the company failed to respond within seven days, the department would be constrained to initiate prosecution proceedings against the e-commerce firm and all the directors at a competent court without any further notice.

The department had found two directors responsible for the violation and had sent across notices to both Amazon and Flipkart on October 16 for violating the rules. A government source told that the issue is not about the penalty amount alone, but that a message is sent across to other e-commerce firms that they need to comply with the rules.

In July, late Ram Vilas Paswan, the former consumer affairs minister, directed state governments to strictly enforce the provision that requires all companies and e-commerce businesses to display the origin of all their products. According to the provision, whether a product is sold online/offline, the country of origin needs to be displayed, which is mandatory.

Problems faced by E-commerce businesses

There are millions of online sellers, hence the number of listings, of which some are new, and some are old. While the new listings specify the country of origin, the old ones do not, and it will take much time for it to be updated.

Another problem that sellers face while mentioning the country of origin is the multiple sourcing of products.

In response to government action, e-commerce companies are seeking extension of deadlines on behalf of the sellers who meanwhile update their profile. Hence, they are looking forward to some step to be taken in this respect.

After Amazon and Flipkart violated the government policies, The Confederation of All India Traders (CAIT) has asked for a stern action to be taken on this arbitrary attitude and Foreign Direct Investment (FDI) norms of these companies.

CAIT demand stern action against e-commerce business:

On November 4, the traders’ body in a letter to Commerce Minister Piyush Goyal alleged that the online retailer had not sought the government’s approval for conducting multi-brand retail activities in India and demanded action and imposition of maximum penalty against the company.

The CAIT has sent a memorandum to the Secretary of Department of Internal Trade and Industry Promotion (DPIIT), Guruprasad Mohapatra complaining against Amazon.

CAIT has also indicated that both Amazon and Flipkart have made violations under the Foreign Exchange Management Act, 1999 and demands for strict action and punishment. National President BC Bhartia and general secretary Praveen Khandelwal of CAIT told that FDI is not allowed for the inventory-based model of e-commerce, despite them indirectly controlling the Indian companies.

CAIT alleged that Amazon has investment “of about Rs 4,200 crore in More Retail Limited (a multi-brand retail company); on the face of it looks like it is controlled by an Alternative Investment Fund (AIF) of Samara Capital, and has investment of about Rs 1,430 crore in Future Coupons Private Limited, a controlling investment in Future Retail Limited (a multi-brand retail company).”

The traders’ body further alleged that all these investments were in violation of FEMA Rules and Regulations, and urged the government to take immediate action.

Meanwhile, Flipkart is owned by Walmart holding Aditya Birla Fashion and Retail Ltd, again a multi-brand retail company. Therefore, e-commerce bunnies are indirectly controlling the sellers or their inventory.

CAIT alleged that Amazon India, is a make-believe e-commerce marketplace platform, but in reality (it is) indirectly carrying multi-brand retail business. The trader’s body stated that the Amazon have invested Rs 35,000 crore in taking over the Amazon India, based on the information in the public domain. It is also one of the cause for the death of the small traders in the country.

Denying the allegations, an Amazon spokesperson said: “As a responsible investor and a long-term player in India, Amazon complies with FDI laws and seeks regulatory approvals including from the Competition Commission of India. Our investment in Future and all investments in India comply with applicable regulations.”

On November 23, CAIT had sent a letter to RBI Governor Shaktikanta Das take cognisance and initiate proceedings against banks for offering illegal cashback and discounts on e-commerce platforms as such cashback violate the Constitution and competition laws.

On November 27, CAIT stated displeasure on the amount of penalty imposed on Amazon India, for not providing the compulsory ‘Country of Origin’ details on products displayed by the e-commerce website. They stated that such smaller fines would not make the offender realise their mistakes, which is opposite to the fundamental principle of charging penalities.

Retail trade is the lifeline of the Indian Economy and is a source of employment and livelihood to 25 per cent of the population. The capital dumping has had a negative impact leaving many people unemployed.

Implications of penalties on FDI:

India has been cautious, in opening up the retail sector to FDI because the livelihood of many small traders is at stake. For instance, within the grocery segment alone, there are around 12 million mom-and-pop stores. It is only during the last 7-8 years that the retail sector has been slowly opened for foreign investment, step-by-step and with stringent conditions. A free run foreign retail giant like Amazon will sound the death knell for many of these small traders.

In the retail sector, FDI is allowed in single-brand retail under the automated route. It is also allowed in multi-brand retail but only with government approval and tons of restrictions. The principles involve 50 per cent of the entire FDI money to be invested purely within the backend infrastructure. There are clauses for mandatory local sourcing of products and services. Such entities cannot trade utilizing e-commerce and corporations that have FDI can do multi-brand retail in just select states.

Now is the best wager for the government to create a comprehensive amendment to plug all loopholes and arm itself with powers under the exchange Management Act and free run foreign retail giant regulations to punish the guilty. Enforcing laws supported by forms should stop. It is time that the enforcement of FDI laws in e-commerce is supported substantially.

I am an aspiring journalist who is very enthusiastic and assure to do my require job responsibly. I have a creative side to me as well and would do any task assigned to me with utmost sincerity. I like reading, listening to music and have started exploring art. Writing poems is something I do to pen down my thoughts as well.


All You Need To Know About National Institute Of Food Technology Entrepreneurship And Management Bill 2021



National Institute Of Food Technology Entrepreneurship And Management Bill 2021

On July 26, 2021, Lok Sabha passed a bill under the ministry of Food Processing Industry. The bill is titled as National Institute of Food Technology Entrepreneurship and Management Bill, 2021. The main motive of this bill is to address issues with the Food Processing Industry, Entrepreneurship and one Institution for National Importance. With the passing of this bill, the Indian Institute of Food Processing Technology (IIFPT) and National Institute of Food Technology Entrepreneurship and Management (NIFTEM) is now merged as Institutions of National Importance, and it aims at providing various research and advancement in learning about the Food Industry and its associated branches. The bill was first introduced in the house in February 2019 but was pending due to protest by the opposition.

Significance of Institutions of National Importance (INI)

With the passing of this bill, the institutions enjoy greater autonomy through which they can carry out various courses, research attracting skilled faculties and students from all over the country and overseas. Good standards in education will be adopted to improve the present and future of education in this branch and sector, overcoming the technological gap in the country. This law aims to improve and introduce new changes in food, bio-nanotechnology, cold chain technology etc. The desired efforts will be taken in terms of human resources and infrastructure developments, labs for research etc. Liberty to open centres anywhere in India is also granted to INI and include courses regarding food technology certification and improving the workforce of the country.

Some other important features of this act are the Institution has been authorized with the Board of Government, Senate and other acting Authorities. The Council of Board will include 16 members from different branches from the same field. The Head will be Chairperson, who will be a skilled person from the Food Industry, the Director, Dean and Registrar. Members appointed from Centre and State Governments, Members from FSSAI and Council of Agriculture Research, as mentioned in the bill. The 16 members of the board will carry out work of taking administrative decisions, creating annual budgets and paths for institution progress as an organization, establishing departments, their appointment terms of services, faculties etc. The Board of Council also holds power to grant Honorary Degrees and Diplomas. The Senate shall be the principal academic body of the Institute, consisting of the people such as Director as the Chairperson; Registrar; Full-time skilled level Professor; and Three academically skilled Individuals nominated by the board from the field.

The Union Minister of Food Processing Industry, Mr Pashupati Kumar Paras, expressed his gratitude to PM Modi for this landmark step in this industry from his Twitter handle, indicating new opportunities in Food Technology Industries. Therefore, this Act looks promising on paper with new opportunities and in Educational Development. Amidst the Pegasus Spyware and repeal of the farm laws, this looks positive from the Modi Government.

Continue Reading


Curious Case Of Pegasus: Explained



Pegasus II News Aur Chai

Pegasus is a spyware that can hack the victims’ mobile phones and read their SMS messages and emails. The Pegasus spyware is owned by an Israeli software company named NSO Group. According to the various reports, this company has targeted more than 50,000 phone numbers at the Global level, of which 300 are in India for surveillance.

The news broke out after the 17 media partners investigated. This investigation brought into the picture information about a leaked database of mobile telephone numbers of Indian Ministers, Opposition leaders, journalists, the legal community, business people, government officials, scientists, activists and many influential personalities of the nation.

Pegasus Spyware and India

According to the report by the agency, the Israeli company which sells Pegasus around the world says that its clients are confined to ‘vetted governments”, believed to number 36. The NSO Group also says that ‘the target list in India is not ours, never was.’ Their refusal of the leaked database has created a loophole in understanding this case.

This whole case has violated the integrity of democratic institutions. According to the report by the agencies, after the mobile phones of the opposition leader Rahul Gandhi and various other leaders were hacked under the Pegasus spyware surveillance. Multiple tweets were made against the Bharatiya Janata Party(BJP) government in India. This whole case has become one of the major threats in the political arena and the Indian Democracy.

Though at the start, it was used for national security purposes. The explosive expansion of surveillance technology vendors has become a vast human rights and a global security issue. If such surveillance technologies increase, it might cause a lot of problems to countries around the globe. Hence, as a precaution, all these countries need to work on regulating this technology.

According to the reports by the agency, one of the targeted phones by the Pegasus spyware was of the former election commissioner of India, Ashok Lavasa. Various such people and such opposition leaders were somehow against the BJP government having their phones hacked with the NSO-owned spyware. All these instances and the names in the leaked list have pointed figures towards the Modi Government.

The Modi government’s stand on this case was put forward in Lok Sabha by two serving ministers, Ashwini Vaishnaw and Prahlad Singh Patel. These two leaders were also featured in the leaked database. The recent Information Technology Minister, Ashwini Vaishnaw defended the BJP government in the parliament by saying, “the expose was an attempt to malign Indian democracy and its well-established institutions.” She even said, ‘any form of illegal surveillance is not possible with the checks and balances in our laws and robust institutions.’

This case has adjourned the parliament proceedings due to the protests inside and outside the house of parliament by the opposition party.

Pegasus Spyware and World.

 In the statement given to the agency, Access Now, an organisation defending the digital rights of global users, said it was outraged that products sold by NSO were allegedly “used to hack and invade the private communications” of thousands of people across the globe.

At a global level, France’s Emmanuel Macron was targeted in the Pegasus spyware case. As the phone of French President Emmanuel Macron was hacked, the investigation was carried out and later on was published which was directed by the Paris-based non-profit journalism group Forbidden.  After this case came in front of the whole world, the Pegasus spyware surveillance came into the picture.

If this continues for some more time, it will ruin India’s Democratic values at a global level. As well as this might become a huge technological threat between the different nations around the globe.

Continue Reading


Modi Cabinet 2.0: Young and Dynamic Leadership or Otherwise



Cabinet II News Aur Chai

On the 7th of July, the union government announced the biggest cabinet expansion in the 7 years of NDA rule. The recent expansion increased the size of the Council of Ministers from 53 to 77. About 43 new ministers were sworn in, 15 of which were Cabinet Ministers and 28 Ministers of State (MoS). This is the first cabinet overhaul in the second term of NDA governance.

Experts however claim that the new cabinet expansion is a pre-emptive measure to balance electoral formulae in different states ahead of the 2022 State Assembly elections. It is also conjectured that the reshuffle comes as rectification of prolonged criticism about BJP’s governance in the past 2 years, including the Healthcare management during the Pandemic.

The Performance Paradox

This recent cabinet expansion is a report card of the BJP government’s performance in the last 2 years. Major ministerial changes, such as the resignation and replacement of Dr. Harshvardhan as the Health Minister indicate a confession of their mismanagement of the pandemic.

He has been replaced by Mansukh Mandaviya, a 2 time Rajya Sabha MP who has also been awarded by the UN for initiatives in Women’s healthcare in the past. His appointment as the Health Minister is one of hope for BJP, to change and streamline (a.) the COVID-19 Pandemic response and (b.) BJP’s image in the name of healthcare management.

On the contrary, Anurag Thakur’s promotion from MoS Finance to a Cabinet Minister defies all logical explanations for awarding performance. Not only has India’s economic condition worsened under his management, his controversial statements like “Desh ke Gadaaro ko…” do not present a strong case for him. His appointment is a political investment by BJP in Himachal Pradesh’s state elections next year which happens to be Thakur’s home state.

Similarly, Sitharaman’s finance ministry has remained untouched, after historical mismanagement of our Finance capabilities. All of this reflects a selective approach adopted by BJP, which is one of political hesitation and hyperopic ignorance.

BJP’s Political Calculator

Apart from the ‘punishment’ narrative, the new cabinet expansion has also given an insight into BJP’s political planning.  This expansion has incorporated key leaders from several states that go to elections next year. Moreover, it has also been carefully planned to cover the losses BJP has incurred in the past two years.

As a reward for dismantling the elected Madhya Pradesh government and tipping scales in BJP’s favor, Jyotiraditya Scindia was appointed as the Cabinet Minister for Civil Aviation (a post held by his father as well in ’91) almost after 3 years.

On the contrary, Pashupati Kumar Paras got an early reward for breaking down Lok Janshakti Party’s (LJP) representation in Lok Sabha. He was appointed as the Union Minister for Food Processing, after the attempted coup on Chirag Paswan’s leadership.

Sarbananda Sonowal, who was replaced by Himanta Biswa Sharma as the Chief Minister of Assam after the fresh elections, was also awarded a berth in the Cabinet. It is conjectured that this development was in talks ever since Himanta Biswa Sharma was chosen as the CM.

As the Uttar Pradesh elections near, BJP also made sure to improve representation from the state. Major appointments such as Niranjan Jyoti (MoS Food Processing), Anupriya Patel (Mos Commerce and Industry), and Bhanu Pratap Singh Verma (MoS MSME) were made majorly because of their heavy support base in UP.

Following the same lead, Ajay Bhatt from Uttarakhand was appointed as MoS Defence and Tourism. As seen earlier, BJP has made major organizational changes in Uttarakhand which goes to elections next year.

Some Positives

In the mirage of calculated placements and image reconstruction, BJP has hit a few rights with this organizational change. The new cabinet includes a maximum number of women to have ever served in a Union Cabinet, a first in a nation with largely patriarchal tendencies.

The cabinet has also tried to focus on bringing people with commendable background experience and education on board. Ashwini Vaishnav, former IAS and an alumnus of Wharton School have been given major ministries such as Railways, Communications, and IT. Similarly, Anupriya Patel who has been given the Commerce and Industry as an MoS has also served as an educator at Amity University.

Moreover, the diffused reliance on regional strength has become the overarching theme in this cabinet reshuffle. Even though the ruling party intends to balance the voter dynamics, this regional unity has become something to watch out for.

Yet, the big story remains the ouster of major politicians who have served loyally and faithfully to this government. Ravi Shankar Prasad, Prakash Jaavedkar, and Dr. Harshvardhan are major losers in this dynamic reshuffle. While the current government has tried to modernize the leaders of this nation, it has set a new precedent that loyalty is not the most critical virtue anymore; Election Commission’s schedule is.

Continue Reading

Most Popular