The Indian Sellers Collective, a non-governmental trade association committed to bringing to the fore the voices of micro and small enterprises and family businesses across India, has written an open letter to. R. Narayana Murthy urging him to end the partnership with Amazon for Cloudtail India.
The letter states that for years, Murthy has been the idol of millions of Indians and more than leading Infosys and the Indian IT services revolution for India, his greatest achievement has been his adherence to the dharma of straight and the narrow and constant emphasis on honesty, integrity, fairness, values, and transparency.
However, this has been changed since 2014, when Murthy has been in cahoots with Amazon through a name-lending arrangement with Cloudtail, acting as a front for Amazon’s retail business and defying the objectives of the policies of the Government of India.
The letter said just for a fixed fee or returns, Murthy has sacrificed the interests and livelihood of millions of small traders in India and left them at the mercy of Amazon.
It states that Cloudtail India has been the largest seller on Amazon India. On paper, this arrangement does not flout India’s FDI regulations, however, in reality, it is the mysterious Hober Mallow Trust that actually owns and controls Cloudtail.
Some signs are clear – the senior leadership of Cloudtail as well as the majority of board members of Cloudtail are all former Amazon employees. In 2018, the government amended the laws to stop these practices of foreign retailers forming front companies to carry out retailing and Murthy promptly increased his stake to 74 percent but changed nothing else.
Reacting to the issue, Ashwani Mahajan, National Co-Convener, Swadeshi Jagaran Manch said: “Foreign retailers operating ecommerce marketplaces in India have been finding creative routes to flout India’s retail FDI laws. This is a cause of worry among the Indian seller community, necessitating a need for continued 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.”
Abhay Raj Mishra, President, Public Response Against Helplessness and Action for Redressal (PRAHAR) said: “Foreign ecommerce retailers operating in India have time and again mocked the spirit of the law while following the letter of the spirit. Amazon’s covert understanding with Cloudtail, a majority company of N.R. Narayana Murthy is one such glaring example. “
AIOVA spokesperson stated: “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.”
Dhairyashi H. Patil, President, All India Consumer Products Distributors Federation (AICPD), said: “He must once again rise to the occasion and come clean on his alliance with Amazon India and the Hober Mallow Trusts and Catamaran.”
“Cash-rich entrepreneurs in the country are over-ambitious. They are using smart tactics to evade the laws. We must stop them in their tracks before they push people into slavery the way 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 Shriram Baxi, General Secretary, Federation of All India Distributors Associations (FAIDA).