As the countdown begins for the revised FDI policy for e-commerce to come into effect on February 1, both the parties – e-commerce companies and trade associations are jostling for their respective standings to be heard from the government. While the former wants the extension of the deadline to reportedly ‘comply’ with the tweaked rules, the latter is determined to ensure no delay or change in the norms.
So much so that Confederation of All India Traders (CAIT) would not going to except anything less than the policy’s strict implementation, says its national secretary general Praveen Khandelwal. He further details out their part of the agitation in interaction with FE Online.
What options you are looking at in case of any changes made to the FDI policy?
We will launch a nation-wide agitation if the government makes any change or amendment in the policy to the advantage of global e-commerce players. This may include protests, road marches, representation to district collectors in the name of PM Modi, rallies. We might even go for Bharat Bandh and seeking the intervention of the PM.
Would your agitation be limited to Amazon and Flipkart?
No, we will later challenge Ola and Uber for the kind of monopoly they have maintained in the market and are allowed to charge dynamic fair. This affects traders involved in the transportation business who are constituent of our association. Grofers, Swiggy, Zomato etc., are also adopting the same technique of giving cash back and discounts being funded by investors.
How large the impact you see of your agitation in the upcoming elections?
As per a 2017 report, there around 7 crore small businesses in the country contributing 45% to national GDP. If anything goes against their interest, then certainly there will be much resentment which will be reflected in the upcoming elections. From 1 February we are launching a campaign to convert the trading community into a vote bank. The slogan would be “One Nation, One Trader, One Vote”. By one vote I mean entire voting strength linked with one trader. By around 25th February, we will plan the proceeding of the campaign to make it a nation-wide protest. Let’s say if each establishment has at least 2 employees and owners have minimum 2 members in their families, then we are looking at around 25 crore people that will impact the elections.
How would you react to support coming in from various industry bodies and associations for e-commerce companies?
This hue and cry is because of the Press Note no. 2 by which the government has made its intentions clear of implementing the policy very strictly which would lead to the fall down of the business of e-commerce companies. They are making all kind of pressure tactics to the government through roping in the US Chamber, FICCI, CII and even their investors.
There was a recent report quoting PwC on FDI restrictions in the e-commerce sector might reduce online sales by $46 billion by 2022. Do you think that’s valid?
PwC is the latest to join these associations in pressurising the government. It is a false report because PwC had very categorically said in the report that it relied on the data provided by the industry and information available in the public domain instead of conducting an independent study or survey done by PwC. The report has come at a time when the government is strictly implementing the policy. So, PwC is working as a mouthpiece of these organisations.
Would you blame the government too for the current scenario?
Though the policy was there since last two years, it appears that the government was bit sleeping on the issue and was not very serious about its implementation as no action was taken even as we made several representations. There was no reply from them. As a routine matter, the complaints were forwarded to the Enforcement Directorate and the Reserve Bank of India for further investigation but none of them took initiatives to institute any kind of enquiry. The e-commerce players took advantage of that and indulged into all kind of malpractices including predatory pricing, vendor exclusivity, deep discounting, funding losses etc.
So, what are you suggesting to the government as of now?
We want businesses to obtain a compliance certificate from the government for the year 2018-19 stating that they have adhered to the policy in letter and spirit. If they cannot obtain then their portal should be suspended and shouldn’t be allowed to raise any funds. The revised policy should be applicable to domestic e-commerce companies as well for a level playing field as they are also involved in deep discounting. It doesn’t make sense from which investor, Indian or foreign, the company has raised money from. It is about such malpractices undertaken by both foreign and domestic e-commerce businesses.