CAIT urges Modi to ensure enforcement of new ecommerce FDI norms

Mumbai, Jan 24 (IANS) The Confederation of All India Traders (CAIT) on Thursday urged Prime Minister Narendra Modi to ensure that the government does not to give in to the "pressure tactics" of several global e-commerce players to postpone the February 1 deadline for implementing the new foreign direct investment (FDI) rules in e-commerce.

In a letter to the Prime Minister ahead of the February deadline, CAIT said the new FDI rules in e-commerce will enable millions of traders to return to business and "crores of families who have been adversely impacted economically, will again be able to conduct business in a fair environment."

"It has been observed that several global e-commerce players in association with vested interest chambers and organisations are using all kinds of pressure tactics to halt the clarification issued by the Commerce Ministry," CAIT wrote.

E-commerce giants, Walmart-owned Flipkart and American multinational Amazon, had sought an extension of the FDI implementation deadline of February 1 on the grounds that the changed regulations require extensive restructuring of their business model.

As per the new norms, online marketplaces such as Flipkart and Amazon have been barred from selling products of companies where they hold stakes and the government has also banned exclusive marketing arrangements that could influence product prices.

"Such a step will prove to be much beneficial not only to about 7 crore small businesses in both offline and online but in long term will also be benefited to the consumers of the country," the traders' body said with reference to the new FDI rules in e-commerce.

"It is appreciated that the government has recognised the illusion created by global e-commerce players in the country and under the garb were indulging into all kinds of malpractices including predatory pricing, deep discounting, loss funding and exclusivity which converted the e-commerce market into an uneven level playing field devoid of any fair competition," it added.

At a press conference here earlier this month, CAIT also demanded that the government make it mandatory for the e-commerce companies to obtain a compliance certificate as on March 3, 2019, and companies without such a certificate should face restrictions in operating their ecommerce portals.

"The companies should not be allowed to raise funds until compliance certificate is obtained. Already companies have circumvented law by converting the marketplace to an open market for B2C (business-to-consumer) business, which is against the FDI policy and its letter and spirit," CAIT Secretary General Praveen Khandelwal had said.

CAIT on Thursday said that e-commerce majors are circumventing the spirit of the policy by using artificial companies on their portals for influencing the price of the commodity.

"Millions of families of small businesses have been greatly disrupted due to unethical business practices of such e commerce players and many retailers had to shut their shops and huge job loss happened in the retail sector," the body said.