CAIT blamed the e-commerce companies for taking advantage of “systematic loopholes” in the rules to indulge in business-to-consumer format despite being just a platform connecting buyers and sellers.
Traders’ body Confederation of All India Traders (CAIT) has requested Commerce minister Piyush Goyal to make registration of e-commerce companies with the Department for Promotion of Industry and Internal Trade (DPIIT) mandatory along with disposing of the cash on delivery (COD) payment mode to boost digital payments. “While e-commerce has great potential but it is currently vitiated by certain malpractices that have led to a lack of level playing field and fair competition. We suggested few steps to be taken get rid of these malpractices while we have already launched a nationwide campaign to digitise 7 crore traders of the country,” CAIT’s Secretary General Praveen Khandelwal told Financial Express Online. India’s booming e-commerce market is currently dominated by Walmart-owned Flipkart and Amazon even as Reliance’s Mukesh Ambani is doing the necessary groundwork to become a dominant player in the category.
CAIT’s National President B.C.Bhartia and Khandelwal in a meeting with Piyush Goyal suggested constituting an ‘e-commerce ombudsman’ to deal with violations of rules and setting up a joint committee comprising of senior officials, representatives from trade and e-commerce companies “to ensure smooth conduct of business at e-commerce through dialogues,” the confederation said. Khandelwal and Bhartia blamed the e-commerce companies for taking advantage of “systematic loopholes” in the rules to indulge in business-to-consumer format despite being just a platform connecting buyers and sellers. For instance, “these companies offer sale but if they claim to be just a marketplace then how can they do that because goods lie with registered sellers?” said Khandelwal.
The traders’ boy argued that the loss accrued to sellers by selling goods at a much cheaper rate is being subsidized by the marketplace or the manufacturers or someone behind the curtain or it has more influx of products that originate from grey market and hence there is a difference of prices in offline and online trade. “We believe that there are some corporate investors who had earlier lobbied for FDI in multi-brand retail. They couldn’t enter into retail trade and it seems they are the ones who are operating from behind the curtain,” Khandelwal said.
The government had earlier this week eased FDI restrictions in terms of local sourcing in single-brand retail in India along with allowing online sales without prior opening of brick and mortar stores. Single-brand retailers having over 51 per cent FDI earlier had to source 30 per cent of their goods from the domestic market. However, the government decided that all goods procured from India by the company for that single brand will be counted towards 30 per cent local sourcing guidelines whether the company sells the goods in India or export them.