New Delhi: Traders' body CAIT on Monday urged Commerce and Industry Minister Piyush Goyal to initiate an audit into the business model of e-commerce firms Amazon and Flipkart.

In a letter to Goyal, CAIT said that since Amazon and Flipkart consider brands responsible for offering deep discounts, the government should convene a meeting with major brands to ascertain the truth.

"The business model of both companies (Amazon and Flipkart) should be audited by the government to arrive at real conclusion," it said in the letter.

Last week, senior officials of the Department for Promotion of Industry and Internal Trade (DPIIT) held a meeting with the representatives of Amazon and Flipkart following a complaint by the Confederation of All India Traders (CAIT).

"...both Amazon and Flipkart in a clandestine manner refuted the issues raised by us even after showing relevant evidences. For offering huge discounts on their portals, they have categorically said that it is the brands which are offering discounts and they (Amazon and Flipkart) have no role in it. To other concerns, they did not own the responsibility citing their own explanations based on several flimsy grounds," CAIT said in the letter.

CAIT Secretary General Praveen Khandelwal said the body apprehends that in order to escalate the value of the companies, the investors are funding their losses, which enables them to offer huge discounts.

"It appears that it is not a business model but a valuation game of investors who are hugely benefitted when they exit their investment at a time when the valuation of the company becomes too high," he added.

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