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The government has received complaints from traders and industry associations against marketplace ecommerce entities alleging violation of foreign direct investment (FDI) norms, the Parliament was informed on Wednesday.

In a written reply in the Lok Sabha, Minister of State for Commerce and Industry Som Prakash said it has been alleged that certain marketplace ecommerce entities have created complex ownership structures and are engaging in inventory-based models of ecommerce through controlled vendors/preferred sellers.

There are also allegations regarding deep discounting, predatory pricing and exclusive arrangements, he said.

The current FDI policy allows ecommerce entities to engage only in Business to Business (B2B) ecommerce, and not in Business to Consumer (B2C) segment.

Further, 100 per cent FDI under automatic route is permitted in the marketplace model of ecommerce. FDI is not permitted in the inventory based model of ecommerce.

“The government has received complaints from traders and industry associations against marketplace ecommerce entities alleging violation of the FDI policy on ecommerce sector,” the minister said.

In a separate reply, he said as on July 26 this year, the GI (Geographical Indications) Registry, Chennai has registered 4,885 GI authorised users.

Replying to a question about patent waiver proposal at the WTO, Commerce Minister Piyuh Goyal said at present, the text-based discussion on the TRIPS waiver proposal is underway at the WTO.

The agreement on Trade-Related Aspects of Intellectual Property Rights or TRIPS came into effect in January 1995. It is a multilateral agreement on intellectual property (IP) rights such as copyright, industrial designs, patents and protection of undisclosed information or trade secrets.

On October 2, 2020, India and South Africa submitted a proposal for waiver from certain provisions of the TRIPS Agreement for the prevention, treatment and containment of COVID-19 to the World Trade Organisation (WTO) TRIPS Council.

The proposal seeks temporary waiver from certain provisions of the agreement related to patents, copyrights, industrial designs and trade secrets, so far as they pose barriers to accessing COVID-19 medical products and technologies.