CAIT Accuses Quick Commerce Players Of Violating FDI Norms

The Confederation of All India Traders (CAIT), which has been raising its voice against the alleged violations of laws by ecommerce giants like Flipkart and Amazon, has now trained its guns on quick commerce platforms like Blinkit, Swiggy Instamart, and Zepto. 

The traders’ body released a white paper on Wednesday (November 13), accusing the quick commerce players of manipulating FDI rules, violating competition laws, promoting aggressive pricing, and establishing near-monopolistic control over supply chains—all of which are reportedly forcing traditional retailers out of the market.

“These platforms are aggressively pushing small retailers out of the market,” MP and CAIT secretary general Praveen Khandelwal said. 

The white paper details an array of alleged infractions by quick commerce platforms, which could have far-reaching consequences for small businesses:

Exclusionary Deals: CAIT accused the quick commerce platforms of maintaining exclusive agreements with preferred sellers, limiting the market reach for smaller, independent retailers.

FDI-Backed Predatory Pricing: Backed by over INR 54,000 Cr in FDI, quick commerce firms are allegedly using these funds not for infrastructure but to fund steep discounts, squeezing traditional stores out of the market.

Opaque Operations: CAIT claimed that these companies are obscuring critical seller information, depriving consumers of transparency regarding product origins and pricing structures.

Indirect Inventory Control: According to CAIT, quick commerce platforms are sidestepping FEMA rules by indirectly managing inventory via selected sellers, a practice not allowed under India’s FDI guidelines.

Notably, CAIT has been vocal about alleged unfair trade practices by ecommerce platforms in India. In October, CAIT criticised the Competition Commission of India (CCI) for what it described as inadequate action and mishandling of investigations into anti-competitive practices by ecommerce giants Amazon and Flipkart.

In a separate whitepaper, CAIT called for the establishment of a dedicated ecommerce regulator to address unfair trade practices in the sector.

Earlier this year, CAIT also accused Amazon and Walmart-backed Flipkart of violating antitrust directives. Recently, reports indicated that both companies could face penalties of up to 10% of their global annual turnover for breaching competition laws.

The latest development comes amid the rising popularity of quick commerce in the country. However, this has also brought with it rising scrutiny. In October, the Central Consumer Protection Authority (CCPA) was said to have sent notices to some quick commerce companies for violating metrology norms.