Reliance Retail has accused e-commerce marketplaces of exploiting the complex legal structures to bypass the country's e-commerce rules which do not allow foreign capital in the inventory-based model.
At a meeting called by the commerce ministry, Reliance Retail's representatives said the Indian e-commerce policy does not allow foreign capital in the inventory-based model and foreign investment is allowed only in pure technical infrastructure/ platform that facilitates the meeting of buyer with sellers.
Such platforms cannot act as sellers themselves, directly or indirectly, they said, adding some foreign companies have used complex legal structures to exploit loopholes or used creative interpretation of the policy that violate the policy in spirit.
Such legal creativity includes creating a multi-level company structure to hide the real relationship between the marketplace entity and the sellers, they told the meeting.
The continued violation creates the doubts about legal sanctity of the policy especially in the mind of new e-commerce players and so it is imperative that the rules are clarified to an extent that these are not subject to such creative interpretation, the officials told the meeting.