The All India Footwear Manufacturers & Retailers Association on Monday argued in the Delhi High Court that the case it filed against ecommerce companies accusing them of violating the country’s foreign investment rules was still relevant.
The association had accused ecommerce firms with foreign funding of directly selling to consumers, which local rules don’t permit.
On March 29, the government issued a notification with clearer rules, which continued to bar foreign direct investment in inventory-led ecommerce and allow overseas capital in marketplaces, but restricted such firms from influencing prices on their platforms directly or indirectly.
According to the regulation, ecommerce entities providing marketplace must maintain level playing field for all sellers.
At a hearing on May 5, government lawyers told the court that with these regulations in place, the case had become “infructuous”.
However, on Monday, lawyers for the shoemakers said several ecommerce companies were undertaking actual retailing themselves. “The government had said the new notification kills the case. We argued the writ petition is not infructuous because the new regulation confirms FDI in inventory-led ecommerce is not allowed,” said Rishi Agrawala, a lawyer representing the footwear association. The court adjourned the matter to July 26, Agrawala said.
Two separate cases filed in the Delhi High Court by the associations representing the shoemakers and brick-andmortar companies had alleged that ecommerce companies were circumventing India’s foreign investment by operating marketplace models, yet indulging in retailing directly to consumers. The court cases prompted the Department of Industrial Policy and Promotion to spell out the rules for foreign funded marketplaces. Mark Stone JerseyShare This