Ease of doing business for MSMEs: Retail traders and e-commerce sellers have levelled criticism against the research report on the e-commerce sector and MSMEs in the online and offline markets by the Indian Institute of Foreign Trade (IIFT) and e-commerce company Flipkart Internet which funded the research. The traders have essentially questioned the role of the e-commerce company and IIFT in the report launched on November 14.

The report E-Commerce Majors, SSI retailers, and the Indian Economy – Theory and Empirics had noted that the e-commerce sector cannot be blamed for the slow growth of the Indian retail MSME sector as pointed out by the country’s traders’ associations. Moreover, it is MSMEs’ “structural weaknesses” due to which they are facing issues related to their growth in the new age of digitalisation, according to the report.

Traders body Confederation of All India Traders (CAIT) said “it is strange that an autonomous body under the Ministry of Commerce is taking funds from a company which is charged for malpractices by various government institutions.” 

CAIT National President B C Bhartia and Secretary General Praveen Khandelwal in a statement said, “IIFT, which has foreign trade as its core competence area, is poking nose in the internal trade of the country and accusing MSMEs and small traders. It looks that the report is nothing but an orchestrated document to give clean chit to Flipkart.” The confederation said trade associations are surprised for not being reached out by IIFT for the report. 

Prof. Manoj Pant, Vice-Chancellor of IIFT in a statement on the report launch had said that lack of access to digitisation by a majority of MSMEs is the reason why they have not significantly benefited from e-commerce. 

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According to the report, the retail sector did not suffer from any negative impact due to the emergence of e-commerce. In fact, “e-commerce also has a positive impact on the exchequer in terms of tax revenues owing to the growth of the organized sector. The same was also seen for offline retail firms. Further, the graphical analysis showed that while offline retail MSMEs did not fare too well in recent years, the same has not been true for online retail MSMEs.” 

However, traders have negated the report’s findings. An e-commerce seller seeking anonymity told FE Aspire, “This is just another report for hire prepared by the pseudo marketplaces to promote their agenda. The report does not have a balance approached and should not be given any weightage.” 

The request for comments from IIFT didn’t elicit a response by the time of publishing this article. 

While Flipkart didn’t respond specifically to the report’s finding that e-commerce cannot be blamed for the slow growth of retail MSMEs, a company spokesperson in an email response told FE Aspire, “At Flipkart, we are proud of our commitments and contribution towards bringing over 11,00,000 sellers, mostly MSMEs, into e-commerce, connecting them with pan-India consumers.” 

“It is still the early days of e-commerce in India, and the current impact shows enormous possibilities for the country and small businesses. We remain committed to democratizing commerce in India using our deep technological capabilities, innovation, and handholding the small business community,” the spokesperson added.

Also read: Can’t blame e-commerce for slow growth of retail MSMEs as claimed by traders: IIFT report