The Indian Sellers Association in an open letter addressed to Infosys Co-Founder NR Narayana Murthy have urged him to end the partnership between Amazon and Cloudtail India which is a joint venture between the e-commerce giant and Murthy's Catamaran Ventures.
The Indian Sellers Association is a non-governmental trade association that represents the voices of micro and small enterprises and family businesses across India.
The letter to the Infosys Co-Founder stated that Murthy has been the idol of millions of Indians. It adds that Murthy's greatest achievement has been his adherence to the dharma of straight and the narrow and his continuous emphasis on honesty, integrity, fairness, values and transparency. However, this has been changing since 2014, explains the letter.
The association has accused Murthy of being in cahoots with Amazon through a name lending arrangement in which Cloudtail India is acting as a front for the e-commerce giant's retail business. The letter explains that this has defiled the objectives behind the policies of the Indian government.
The letter adds that just for a fixed fee or returns, the Infosys Co-Founder has endangered the livelihoods of small Indian traders and has left them at the mercy of Amazon. The Indian Sellers Association has alleged that Cloudtail India is the biggest seller of Amazon India. It adds that on paper the partnership of Amazon and Cloudtail India does not violate FDI regulations. The letter explains that in actuality Clouadtail India is owned and controlled by the "mysterious" Hober Mallow Trust, reports the new agency.
The letter further explained that the senior leadership at Cloudtail as well as the majority of its board members are all former Amazon employees. It adds that in 2018, the Centre has amended the laws to stop such practices of foreign firms establishing front companies in the country for their retail interests. It added that Murthy had increased his stake in Cloudtail to 74% but no other changes took place.
Commenting on the issue, Ashwani Mahajan, National Co-Convener, Swadeshi Jagaran Manch, said that foreign retailers running e-commerce portals in the country have been coming up with creative routes to dodge the Centre's retail FDI laws."This is a cause of worry among the Indian seller community, necessitating a need for continuous strengthening of the policies governing Indian e-commerce. Amazon India, through arrangements with companies like N.R. Narayana Murthy's Cloudtail is indulging in predatory pricing and discounting thereby destroying the business of offline retailers and small sellers," added Mahajan.
Abhay Raj Mishra, President, Public Response Against Helplessness and Action for Redressal (PRAHAR) explained that foreign e-commerce retailers operating in India have repeatedly mocked the spirit of the law while still following the letter. "Amazon's covert understanding with Cloudtail, a majority company of N.R. Narayana Murthy is one such glaring example," said Mishra.
E-commerce seller body AIOVA's spokesperson called Cloudtail an "economic terrorist. "It is sad to see Murthy associating himself with an economic terrorist called Cloudtail which crushes thousands of e-commerce sellers inspired by the successes of Murthy," said the spokesperson.
"He must once again rise to the occasion and come clean on his alliance with Amazon India and the Hober Mallow Trusts and Catamaran," urged Dhairyashi H. Patil, President, All India Consumer Products Distributors Federation (AICPD).
Shriram Baxi, General Secretary, Federation of All India Distributors Associations (FAIDA) conveyed that cash-rich entrepreneurs of India are over-ambitious and are using smart tactics to evade the laws. Baxi added that these people must be stopped before they push people into slavery, like how East India Company did years ago. "It is high time that our lawmakers understand the urgency of the problem, review regulations, and undertake necessary policy reforms to ensure harsh penalties and punishments for lawbreakers," said Baxi.
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