Stark differences between offline traders/retailers and major e-tailers resurfaced on Tuesday at a virtual meeting held by the department for the promotion of industry and internal trade (DPIIT), with traders seeking action against e-commerce players like Amazon and Flipkart for violating the country’s foreign direct investment (FDI) rules.The meeting was held by the DPIIT to draw inputs from various stakeholders on a proposed e-commerce policy.
The players representing brick-and-mortar stores also suggested that the government set up a regulator, along the lines of telecom watchdog Trai, to oversee the affairs e-commerce entities to curb potential malpractices by them. Offline retailers have been accusing major e-commerce entities of abusing market dominance and resorting to deep discounting in violation of the FDI rules.
For their part, the senior executives of the e-commerce players, who attended Tuesday’s meeting, highlighted how their companies had bolstered the entire retail eco-system by empowering small retailers, artisans and MSMEs. They also said they had noted concerns raised in the meeting and would submit their views in writing to the DPIIT, sources said. The e-tailers have been maintaining that always abide by the relevant laws.
The meeting was attended by senior executives of Amazon, Flipkart, Tata, Reliance, Udan, Pepperfry and Snapdeal, among others. The participants also included Confederation of All India Traders (CAIT) secretary general Praveen Khandelwal, who led the allegations against e-tailers, and representatives of All India Consumer Products Distributors Federation, Retailers Association of India, Laghu Udyog Bharti and the Federation of Small Industries. DPIIT additional secretary Anil Agarwal chaired the meeting.
Khandelwal suggested that the new e-commerce policy should have clear stipulations about transparent operations of foreign-funded e-commerce players and avoidance of conflict of interest between these marketplace entities and sellers and various other service providers on these platforms, in sync with the extant FDI rules.Last year, amid persistent complaints from brick-and-mortar players against e-tailers, the government brought in amendments to the Consumer Protection (E-commerce) Rules, 2020.
The changes, suggested by the consumer affairs ministry, have proposed to curb so-called ‘flash sales’ of goods and services by e-commerce players, causing discomfort among e-commerce players. While conventional e-commerce flash sales are not prohibited, specific flash sales or back-to-back sales that typically limit customer choice, raise prices and prevent a level-playing field are not allowed. The e-commerce marketplaces are also required to set up adequate redressal mechanisms and appoint a chief compliance officer.
The Centre is also planning to come out with a “clarification” on its FDI policy for e-commerce, which could reportedly tighten the norms further, forcing e-tailers to restructure their existing marketing tie-ups. It could make related party rules more stringent, in a bid to curb any malpractices by the e-tailers. For instance, according to an earlier draft policy, these related parties — as also Associated Enterprises — cannot become sellers on the platform and neither can they do anything that an e-commerce entity is not permitted to do.