RSS Economic Wing Targets Chinese Ecommerce Players, Says Bypassing Indian Laws

The economic wing of Rashtriya Swayamsevak Sangh (RSS), Swadeshi Jagran Manch (SJM), has trained its guns on the increasing popularity of Chinese ecommerce players like AliExpress, Shein and Club Factory.

According to a media report, SJN has said that Chinese ecommerce companies currently receive more than 200K orders per day in India and alleged that these companies are delivering goods via couriers and postal gift shipments, bypassing and evading a range of Indian laws on payment gateways, custom duties and GST.

This, according to SJM, is disrupting the micro, small and medium enterprises (MSME) trade market in India.

It is to be noted here that players like online fashion shopping platform Shein, Hangzhou-headquartered fashion, beauty and lifestyle ecommerce store Club Factory, and Alibaba’s ecommerce unit AliExpress usually take at least 2-3 weeks for delivery of the products.

Even though these websites take significantly longer than their Indian counterparts, the companies have gained an increasing market in recent times because of their wide-ranging products, affordability, and style quotient.

To curb the popularity of Chinese ecommerce players, the RSS’ economic wing is now looking to demand that all product shipments from China to India be channelised through the customs route and till then all postal gift shipments from China be stopped. Download of non-GST compliant and unregistered Chinese ecommerce apps be banned and payment gateways are shut to them.

They have already red-flagged the issue to the Ministry of Commerce and are now preparing to take it to the Prime Minister. The report also noted that the government is considering acting on the issue.

The organisation believes that these players are misusing a clause in India’s Foreign Trade (Development and Regulation) Act, which exempts gifts of up to $70.5 (INR 5,000) — received from abroad by persons living in India — from customs and other duties. The exemption was mainly aimed at low-value gifts sent by Non-Resident Indians to families back home.

SJM claims that customs duties apart, no GST is being levied on these sales, and alleged that there are indications that identities of Indian NRI workers employed in the Middle East are being misused in some of these gift shipments.

The organisation has further challenged that China Post appears to be heavily subsidising packages and delivery cost of products shipped to India to promote its own small industry. Notably, these ecommerce websites are not registered as business entities in India, and therefore, SJM believes there are no easy processes for grievance redressal and returns, and hence the risk of ‘hazardous, prohibited, unsafe or substandard goods arriving in India’.

SJM is looking to demand mandatory registration of ecommerce sites and apps, retail prices and invoices for all their products and higher diligence by India Post including thresholds of shipment booking system to ensure that the Foreign Trade (Development and Regulation) Act is not misused.

They are also looking to suggest an integrated system that connects customs, RBI and India Post to track imports better.

The concern around the influx of Chinese gift sites and their impact on Indian ecommerce has been under discussion for the draft ecommerce policy as well. Last week, the Department of Industrial Policy and Promotion (DIPP),  discussed issues related to gifts from overseas, logistics industry as well as exports as part of an ongoing discussion on the draft ecommerce policy.

[The development was reported by ET.]