Ease of Doing Business for MSMEs: Big e-commerce corporations obtaining deep pockets are leaving no stone unturned in monopolizing the e-commerce organization and retail trade of India with their malpractices and violating FDI policy, traders’ physique Confederation of All India Traders (CAIT) mentioned in a letter to Prime Minister Narendra Modi on Sunday. CAIT, which has been campaigning against Amazon and Flipkart for years now alleging unethical organization practices by them, mentioned that the absence of concrete action against e-commerce corporations has led to a roadblock for little enterprises to run their operations on the net.
The confederation named it “most unfortunate” that “various government authorities have failed to protect the sanctity of the policy and law of the government,” according to the letter. CAIT has been extended alleging that the on the net marketplaces have been undertaking “predatory pricing, deep discounting, loss funding and exclusivity of various products, which are not allowed under the FDI policy,” it had mentioned in a statement final year. However, each Amazon and Flipkart have repeatedly claimed total compliance with the FDI laws.
The Modi government had final year asked the e-commerce corporations with FDI to keep a report to confirm compliance. “Against Sl. No. 15.2.3, for entry (p), the following entry shall be substituted, namely;- (p) e-commerce marketplace entity with FDI shall have to obtain and maintain a report of statutory auditor by 30th of September every year for the preceding financial year confirming compliance of the e-commerce guidelines,” according to a notification by the Ministry of Finance on December 5, 2019, announcing the amendments created in the Foreign Exchange Management (Non-debt Instruments) Rules, 2019.
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The draft Consumer Protection (e-commerce) Rules, 2019, by the Department of Consumer Affairs in November final year had noted that e-commerce corporations need to not straight or indirectly influence the cost of goods, adopting solutions that may perhaps influence ‘transactional’ selection of shoppers, false critiques, and so on and that they need to show contract terms among them and their sellers with respect to returns, refunds, exchange, delivery, payments, grievance redressal, and so on.
“While urging for a strong action against them, it is requested that an e-commerce policy should be announced immediately with an explicit provision of an empowered Regulatory Authority to regulate and monitor the e-commerce business in India,” the letter added. CAIT also sought the issuance of a fresh Press Note and removal of anomalies and disparities of Press Note No.2 of FDI policy.
Last week, CAIT’s National President B C Bhartia and Secretary General Praveen Khandelwal had mentioned in a statement that no permission for FDI could have been granted for the inventory-primarily based model of e-commerce becoming pursued by each (Amazon and Flipkart) of these corporations by the way of indirectly controlling the inventories of most prominent sellers on their e-commerce marketplace platform. The physique wrote to DPIIT Secretary Guruprasad Mohapatra claiming violation of the guidelines beneath the Foreign Exchange Management Act, 1999.
The violations noted by CAIT in the statement integrated Amazon controlling Future Retail Limited (“FRL”), a multi-brand retailer. Amazon controlling More Retail Limited (“MRL”), a multi-brand retailer, Walmart (Flipkart) controlling Aditya Birla Fashion & Retail Limited, a multi-brand retail business, Flipkart straight/indirectly controlling the sellers and/or their inventory on their e-commerce marketplace platform.” It added that Amazon is straight/indirectly controlling the sellers and/or their inventory on their e-commerce marketplace platform, Amazon Retail Pantry promoting multi-brand meals goods on its e-commerce marketplace platform and that Amazon has “reportedly invested in excess of Rs. 35,000 crores for capturing the e-commerce market and in the process has caused a death knell for crores of small merchants in India.”