Claiming that e-commerce giants like Amazon import as much as 80 per cent of the items sold on their platforms, small manufacturers' body has said that their business models do not benefit local industry and are creating jobs of delivery boys only.
"Neither manufacturers nor traders are getting any benefit from the business models of Amazon and Flipkart because they largely import their products from China and Korea and sell here. Nearly 80 per cent of their products are imported," said Anil Bhardwaj, Secretary General, Federation of Indian Micro and Small & Medium Enterprises (FISME).
Bhardwaj said that the global e-commerce players generally source and sell products through their own preferred suppliers and as a result a large number of local manufacturers and traders get crowded out.
He listed out deep discounting and buying products from preferred companies as unfair practices.
"Even if they buy products from local suppliers the commission charged is very high," Bhardwaj said adding that the issues related to unfair practices have been raised with Commerce Ministry on multiple occasions.
FISME maintains that the technology-driven retail is way forward and one cannot be oblivious of the benefits it brings to consumers but at the same time the local industry can also not be ignored given its role in job creation.
"If both traders and local manufacturers are crowded out then how would the local industry survive and employment be generated?" asked Bhardwaj.
As Amazon Founder and CEO Jeff Bezos is currently on his three-day visit to India, the local traders are up in arms against the "unfair" trade practices of the tech giant. Delhi-based Confederation of All India Traders (CAIT) has launched a countrywide protest against the company and has organised protests across 300 cities.
In a setback to Amazon and Walmart-backed Flipkart, the fair market watchdog Competition Commission of India (CCI) has ordered probe into the business operations of both the companies on multiple counts including deep-discounts and exclusive tie-up with preferred sellers.
"For the first time some concrete step has been taken against Amazon and Flipkart who are continuously violating the FDI policy in indulging in a vicious racket of controlling and monopolising not only the e-commerce but even the retail trade as well," CAIT National Secretary General Praveen Khandelwal said after the CCI order.
(Nirbhay Kumar can be contact at nirbhay.k@ians.in)