CAIT Writes To PM, Demand Authority To Regulate Ecommerce In India

Traders’ body Confederation of All India Traders (CAIT) has written to Prime Minister Narendra Modi seeking “strong action” against ecommerce firms for alleged violation of FDI policy by them.

It also sought setting up of an empowered regulatory authority to regulate and monitor the ecommerce business in India.  

In the letter to the Prime Minister, the Confederation of All India Traders (CAIT) claimed that “big ecommerce companies having deep pockets are leaving no stone unturned in monopolising the ecommerce business and retail trade of India with their malpractices and violating FDI policy of the government and relevant laws and rules.” 

It further said that “despite making several complaints against them, so far no concrete action has been taken and therefore it has become a major roadblock for small businesses to conduct online business activities.”  

According to HT, the traders’ body claimed that various government authorities have failed to protect the sanctity of the policy and law of the government.  

“Though the Ministry of Commerce has taken some initiatives to impress upon them to conduct their business activities under the purview of the law but these ecommerce companies have been avoiding the law on one pretext or the other,” CAIT said in the letter. 

The traders’ body while “urging for strong action against ecommerce companies” also requested that an ecommerce policy should be announced immediately with an explicit provision of empowered regulatory authority. 

Last month, CAIT had accused ecommerce major Amazon of violating Foreign Direct Investment (FDI) policy and Foreign Exchange Management Act (FEMA) norms. In a letter to Commerce Minister Piyush Goyal it had alleged that the online retailer has not sought government’s approval for conducting multi-brand retail activities in India and demanded action and imposition of a maximum penalty against the company.

It had also raised objections over Aditya Birla Fashion and Retail’s plans to raise INR 1,500 Cr (about $203 Mn) by issuing 7.8% stake to Walmart-owned Flipkart Group, alleging that the proposed deal violates the government’s FDI policy.

In May, CAIT had tied up with the Department for Promotion of Industry and Internal Trade (DPIIT) to plug millions of kirana shops to digital commerce. The traders association has clarified that the platform will be very different from the private ecommerce entities and will focus on retailers and customers.

Unhappy with the INR 25K penalty levied by the MCA on Amazon India, for not providing the details of ‘country of origin’ of products displayed on its platform, CAIT had demanded a 7-day ban on the Jeff Bezos-owned company.