CAIT urges govt to avoid revising FDI policy to e-commerce players’ benefit

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Published: January 3, 2019 7:20:48 PM

CAIT Secretary General Praveen Khandelwal said that it will "strongly and stoutly" oppose any move to change the policy to the advantage of major e-commerce players.

Flipkart and Amazon, being the largest e-commerce marketplaces in India, are expected to be impacted the most with the new FDI policy.

Traders’ body CAIT has asked the government to avoid changes in the revised FDI policy on e-commerce to avoid an upper hand to big players in the sector, said a PTI report.

The government had last month announced changes, effective from February 2019, that said sellers or group companies of e-commerce marketplaces having equity participation or control on its inventory would not be allowed to sell its products on the platform run. This might jeopardize discounts and cashbacks frantically offered by these marketplaces such as Flipkart and Amazon to acquire customers.

Flipkart and Amazon, being the largest e-commerce marketplaces in India, are expected to be impacted the most with the changes in the FDI policy.

CAIT has alleged that a few US-based forums and chambers and some Indian industry bodies are “pressurising” the government for bringing amendments in the policy to the advantage of large players.

A delegation of CAIT called on Commerce Minister Suresh Prabhu Thursday apprising him of the situation.

CAIT Secretary General Praveen Khandelwal said that it will “strongly and stoutly” oppose any move to change the policy to the advantage of major e-commerce players.

“We strongly oppose such tactics and method of coercion and remain as a strong support to the government in its bid to clean the e-commerce market from unfair and unethical business practices,” CAIT said in a letter to Commerce Minister, PTI reported.

Khandelwal added that the minister assured them of a level playing field for all traders.

However, retail experts have doubted over restriction of discounts by the government. “How will you decide on which product, let’s say, a 10% discount is normal but 20% is more or 5% is too less and 15% is too much. Monitoring that for millions of products listed online is quite impossible,” consulting firm Wazir Advisors founder and MD Harminder Sahni told FE Online last month.

The only way you can control discounts, according to Sahni, is to get a minimum retail price for every product so that online retailers cannot sell below that price after discounts.

“It is impossible to kill discounts though it will certainly have a dampening effect on their size. It will become somebody’s job to monitor which products are getting heavily discounted and violating whatever discount threshold there may be and bring to the government’s notice,” said Devangshu Dutta, CEO, Third Eyesight – a retail consulting firm.

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