E-commerce companies such as Amazon and Flipkart are proving to be a “major roadblock” in small traders adopting digital commerce, traders body Confederation of All India Traders wrote in a letter to Prime Minister Narendra Modi. “Traders across [the] country are more willing to adopt e-commerce as another business avenue,” however, it is the repeated “brazen violation of FDI policy and other laws & rules by e-commerce companies which is proving a major roadblock in adoption and acceptance of digital commerce”, CAIT said in the letter.
It also said that several government institutions have failed to protect the sanctity of the FDI rules, and called for an immediate release of an e-commerce policy with an “explicit provision of an empowered Regulatory Authority to regulate and monitor the e-commerce business in India”:
“It is most unfortunate that even being the custodian of the law, various Government Authorities have failed to protect the sanctity of the policy and law of the Government. Though the Ministry of Commerce has taken some initiatives to impress upon them to conduct their business activities under the purview of the law but these e-commerce companies have been avoiding the law on one pretext or the other. While urging for a strong action against them, it is requested that an e-commerce policy should be announced immediately with an explicit provision of an empowered Regulatory Authority to regulate and monitor the e-commerce business in India.” — CAIT in letter to PM Modi [emphasis ours]
CAIT also said that the government should issue a fresh Press Note clarifying its stance on e-commerce businesses. The organisation has consistently accused Amazon and Flipkart of violating FDI rules. India’s FDI policy for e-commerce, the latest version of which is Press Note 2 (2018), allows 100% FDI in B2B e-commerce, i.e. the marketplace model. However, e-commerce companies operating marketplaces have to meet certain conditions. Among other things, they cannot exercise ownership over any inventory sold on their marketplace, or influence the sale of goods directly or indirectly.
CAIT calls for a week-long ban on Amazon
The body, last week, had called for banning Amazon for a week, after it was reported that the e-commerce company had been fined by the government for not showing the country of origin next to product listings. Each director of Amazon India was reportedly fined ₹25,000 as per the latest consumer protection rules for e-commerce.
However, CAIT said that it was “dejected” at the “paltry” fine being imposed on the company, and instead called for banning Amazon for a week. “Let there be an exemplary punishment-said the CAIT”.
Read more:
- CAIT urges RBI to stop banks from offering cash back discounts on e-commerce platforms
- Traders body urges DPIIT to penalise Amazon, Flipkart for allegedly violating FDI, FEMA rules
- Offline retailers accuse Amazon and Flipkart of deep discounting, predatory pricing and undercutting
- Traders’ body calls for probe into Chinese investment in Flipkart, Paytm, Zomato and 138 other Indian start-ups
