Just a week after the government tightened e-commerce norms and barred online retail firms like Amazon and Flipkart from selling products of companies in which they have stakes, the Confederation of All India Traders (CAIT) has welcomed the move.
On Monday, the CAIT wrote a letter to the Union Minister for Commerce & Industry, Suresh Prabhu, saying that on behalf of 70 million small businesses of the country, they express their satisfaction and gratitude for clarifying the FDI policy in ecommerce. The letter was written by Praveen Khandelwal, who is the National Secretary General of CAIT.
The letter states, “We are sure that now the trend of unethical business practices of exclusivity, predatory pricing, deep discounting and loss funding being constantly adopted by global ecommerce players will come to an end and such Companies will maintain level playing field and fair competition in ecommerce market of India.”
It alleges that several US based Forums and Chambers have reportedly criticised the Indian government for clarifying the issue and are attempting to put some kind of pressure on the government to bring changes in the already clarified policy. The letter adds that it is nothing but the pressure tactics of a few big global ecommerce players which are using these Forums and Chambers as their mouthpiece to bring about further changes to their advantage.
The letter reads, “We, therefore, would like to assure you of full support of the trading community which stands in solidarity with the Government in its efforts to bring equality and fair trade practices in ecommerce landscape for the larger interest of the consumers of the country. We are sure that Government will not bow down under any kind of pressure.”
While calling for the strict implementation of the policy in letter and spirit, the CAIT has made a few suggestions:
a. An Independent Regulatory Authority for Ecommerce should be constituted to regulate and monitor the ecommerce trade. The said Authority should be duly empowered to take action against any entity which defies the policy.
b. Ecommerce policy which is long-awaited should be framed and declared immediately without taking much time.
c. The FDI norms as spelled out in the policy should also be made applicable on domestic ecommerce players as well, to restrict them from adopting any unethical business practices so that they remain at par with other ecommerce players.
The letter ends by saying that the CAIT wants to meet the Minister to discuss this crucial issue.
Earlier, a statement from the Ministry of Commerce and Industry said that online retail firms (e-commerce marketplace entity) are prohibited from mandating any company to sell its products exclusively on its platform only, as per the revised policy on FDI in e-commerce which comes into effect from February 1, 2019.
"An entity having equity participation by e-commerce marketplace entity or group companies, or having control on its inventory by e-commerce marketplace entity or its group companies, will not be permitted to sell its products on the platform run by such marketplace entity," the statement added.