FDI Norms Must Create Answerability for E-Tailers: CAIT

The Confederation of All India Traders (CAIT) has said that foreign direct investment policy in the e-commerce sector should be enforced in letter and spirit so that these e-tailers do not violate the rules.

During the meeting held under the chairmanship of G S Mohapatra, Secretary (DPIIT), on behalf CAIT, its Secretary-General Praveen Khandelwal said that the present policy, that allows 100 per cent FDI in marketplace e-commerce platform and prohibits the FDI in inventory-based model of e-commerce, is absolutely correct and in line with Government’s intent to protect the small merchants.

''The policy should be enforced in letter and spirit," he added.

However, due to creative interpretations about the relationship between marketplace and sellers, these companies are controlling either the sellers on their platform or their inventory.

''The control of foreign marketplace platform entities, over the sellers on their platform, enables them to do anti-competitive practices such as predatory pricing and deep discounting through capital dumping that has led to closure of a large number of small merchants/kiranas leading to job loss for lakhs of people every month,'' Khandelwal said.

The CAIT has been complaining that the presence of big multinational companies in inventory base e-commerce and deep discounting by them has been affecting the livelihood of over 8 crore small merchants/Kiranas.

CAIT has again alleged that large multinational e-commerce companies have continued to indulge in prohibited inventory based model of e-commerce by direct and indirect control over the seller’s/inventory.

He said that the Government should have the right to seek information and audit the accounts of the entities involved in e-commerce.

''An independent regulatory body to be constituted to regulate the sector and take immediate action on violations such as deep discounting, preferential arrangements with sellers, discriminatory treatments etc,'' he added.

Khandelwal once again demanded the Government to initiate strict action and immediate proceedings against Amazon and Flipkart for not just its blatant violations of the FDI policy but also because of their anti-competitive behaviour targeting to wipe out MSME, Small merchants, Kirana by capital dumping, predatory pricing, deep discounting and discriminatory agreements.

The meeting was also attended by representatives of Retailers Association of India (RAI) and All India Consumer Products Distributions Federation. It was chaired by DPIIT Secretary Guruprasad Mohapatra.