All India Mobile Retailers Association (AIMRA), a trade group representing 150,000 mobile phone stores, has urged India Prime Minister Narendra Modi to investigate Amazon’s business practices and impose a daily cap on a single seller’s online smartphone sales, Reuters reported.
Reuters last month published a special report saying Amazon has for years given preferential treatment to a small group of sellers on its Indian platform, using them to circumvent the country’s strict foreign investment regulations.
The report was based on internal Amazon documents dated between 2012 and 2019, the news report said on Monday.
“We were already aware of Amazon’s thought process and strategy,” the All India Mobile Retailers Association (AIMRA) wrote in the letter. The documents, the letter said, “have revealed that Amazon is doing business in India with the strategy of deftly dodging the regulators and politicians”.
AIMRA urged the government to “suspend all Amazon activities in India” until there is an investigation into the company’s practices.
Amazon says it doesn’t give preferential treatment to any seller on its marketplace and has always complied with Indian law.
Indian retailers have alleged that Amazon and Walmart’s Flipkart flout federal regulations and that their business practices hurt small traders. The companies, which run the two biggest e-commerce platforms in India, deny the allegations.
The Amazon documents showed the company helped a small number of sellers prosper on its website, discounted their fees and helped one cut special deals with big tech manufacturers such as Apple.
Some 35 of Amazon’s more than 400,000 sellers in India in early 2019 accounted for around two-thirds of its online sales, the documents also showed.
AIMRA said in its letter the government should cap a single seller’s daily smartphone sales on Amazon and Flipkart at 500,000 rupees ($6,829).
The group alleges the U.S. firms promoted sales on their platforms through preferred sellers, asking the government to investigate tie-ups between smartphone brands and these sellers.
Amazon earlier said in a statement that it was helping small businesses in India and that it “treats all sellers in a fair, transparent, and non-discriminatory manner”.
By 2019, 44 percent of smartphones in India were being sold online, with Amazon and Flipkart dominating the sales, according to Forrester Research.