Trader Lobbies Celebrate As DIPP Refuses To Extend Ecommerce FDI Deadline

After years of protests, nationwide agitations and letters to authorities, traders’ body Confederation of All India Traders (CAIT) and All India Online Vendors Association (AIOVA) have finally found a big win in their fight against leading online marketplaces Amazon and Flipkart.

Just earlier today (January 31), DIPP issued a statement declining any extension to the changes in FDI policy for ecommerce notified on December 26, 2018.

This has brought a sigh of relief and deep satisfaction to CAIT. CAIT Secretary General Praveen Khandelwal told Inc42 that this step is a strong step to clean the greatly vitiated ecommerce market of the country.

Meanwhile  AIOVA, which represents over 3,500 sellers on India’s top ecommerce firms, told Inc42, “Government should realise their work doesnt stop at policy making but also requires enforcement. In past rules have not been enforced, circumvention and self certifications have led to a duopolised market. Government needs to disclosed who is stopping these investigations from happening which is leading to policy intervention”

In the build-up to the February 1 deadline, Amazon had sought a deferment of four months while Flipkart is said to have proposed a six-month extension. The two companies have also written to the Department of Industrial Policy and Promotion (DIPP) on the matter. Amazon reportedly told the DIPP that it would be difficult for the company to comply with the rules by February 1 as it involves extensive overhauling of its business model and systems.

The two ecommerce companies have been offering huge discounts to overhaul their large inventories as they both operate as online marketplaces partnering with large online vendors such as Cloud Retail, Appario and WS Retail.

CAIT also complimented Prime Minister Narendra Modi and Minister of Commerce & Industry and Civil Aviation, Suresh Prabhu for taking such a ‘bold step.’

Khandelwal emphasised, “Post-Independence it is for the first time when the voice of small traders has been heard and acted upon by any government despite strong and hard lobbying the vested interest ecommerce players and US Government. It testifies that our policies are sovereign and deserve no advise or pressure from any quarter.”

However, amid reports of Flipkart and Amazon already working around legal loopholes, Khandelwal noted that the policy needs to be implemented strictly in its letter and spirit. “For this, a regulatory authority should be formed as early as possible to regulate and monitor the ecommerce business of India and much-awaited ecommerce policy should be formulated and announced.”

CAIT also demanded that a Special Investigation Team should be constituted to investigate business modal of major ecommerce players made in the past two years and the restriction stipulated in policy should be implemented on domestic players as well.