Ease of Doing Business for MSMEs: Over 1.5 lakh small shops, mostly engaged in the mobile phone business, have been shut so far due to unruly business behaviour of multinationals and large enterprises and the absence of an effective mechanism to check their business conduct in India, said traders’ body Confederation of All India Traders (CAIT), representing 8 crore traders in the country. “If we have to keep small traders alive and the retail trade working democratically, there is an urgent need for a comprehensive policy for all verticals (of retail trade) and a regulatory authority to monitor trade activities,” the association said.
CAIT has been alleging illegal business practices such as deep discounting, predatory pricing, etc., largely by e-commerce companies in the country leading to an uneven playing field for small retailers. Considering the cross-cutting nature of e-commerce, different laws and regulations govern e-commerce activities in India. These include Consumer Protection Act, 2019, Finance Act 2020, Information Technology Act, 2000, Foreign Exchange Management Act, 2000 and Competition Act, 2002, according to the commerce ministry.
In terms of a regulatory framework, the Competition Act, 2002, provides for preventing practices that may have an adverse effect on competition. Further provisions under Section 3, regarding anti-competitive agreements and Section 4 regarding abuse of dominant position are also applicable for e-commerce platforms. E-commerce platforms with the foreign direct investment are regulated by Press Note 2 (2018) of the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019.
However, “these companies were found doing transactions of illegal goods, openly flouting the law, rules and policy guidelines, creating a non-level playing field, evading both GST and income tax at a large scale but no action has been taken against them so far for vitiating the retail ecosystem, leaving the traders highly disappointed. Why a safe passage is given to global MNCs is beyond anyone’s comprehension,” said CAIT National President B C Bhartia and Secretary General Praveen Khandelwal in a statement.
Meanwhile, the proposed e-commerce policy, which was announced nearly four years back, is yet to come out. Moreover, the government also doesn’t have any plans to set up an e-commerce regulator for e-commerce platforms yet, minister of state for commerce and industry Som Prakash told Parliament earlier this month.