No meaningful action taken by govt in five years to stop malpractices of e-commerce companies: CAIT

1 month ago

Ease of Doing Business for MSMEs: CAIT has been alleging unethical business practices such as deep discounting, predatory pricing, preferential treatment to some sellers, circumvention of FDI laws, and more, by marketplaces such as Amazon and Flipkart over the past couple of years.

eCommerce companiesThe draft e-commerce rules, which were announced on June 21, had sought stakeholders' comments till July 21 this year.

Ease of Doing Business for MSMEs: Traders’ body Confederation of All India Traders (CAIT) on Sunday said that no meaningful action has been taken so far by the government to stop malpractices of e-commerce companies that have proved to be a great nightmare for the traders of the country. CAIT has been alleging unethical business practices such as deep discounting, predatory pricing, preferential treatment to some sellers, circumvention of FDI laws, and more, by marketplaces such as Amazon and Flipkart over the past couple of years. The traders’ body has also been writing to various ministries and Prime Minister Narendra Modi to implement e-commerce rules as soon as possible to curb alleged business malpractices by the e-commerce companies.

“We deeply regret that we have to issue such a statement after waiting for about five years in the hope of any substantial action from the governments both central and state governments. It is most astonishing that US senators have taken cognisance of the malpractices by Amazon in India but so far no government department or the ministry (in India) has taken any note of it. The trading community feels cheated by foreign-funded e-commerce companies,” CAIT’s President B.C.Bhartia and Secretary General Praveen Khandelwal said in a joint statement. Both Flipkart and Amazon are currently facing a probe by the Competition Commission of India (CCI) for allegedly promoting select sellers on their platform and anti-competitive practices even as the two companies have denied the allegations.

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CAIT, which claims to represent around 8 crore traders across over 40,000 trade associations in India, said that while it hopes PM Modi to address this situation “but unfortunately the bureaucratic system has highly distorted his vision about the small businesses. Pension to traders, formation of a Traders Welfare Board, Insurance for the traders, simplified GST, Mudra scheme and several other steps were taken by him but sadly all these schemes were greatly distorted and GST has become one of the most complicated tax systems,” the statement by the traders’ body read. The association had also recently sought a CBI inquiry against Amazon following a Reuters article about how Amazon allegedly copied products and rigged search results in India to promote its own brands.

The draft e-commerce rules, which were announced on June 21, had sought stakeholders’ comments till July 21 this year. However, there is no clarity on when exactly the final rules will be out and implemented. According to a PTI report earlier this month, Commerce Minister Piyush Goyal said that “The consumer rules around the e-commerce are under public consultation. I warmly welcome feedback from various stakeholders but I have to protect everybody’s interest and balance consumers interest, e-commerce interests, retailers’ interests.”

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