Trade forum Confederation of All India Traders (CAIT) has stated that after implementation of the government's FDI policy in e-commerce, platforms like Amazon and Walmart have been forced to withdraw products from their portals, which goes to show that they were earlier indulging in unethical business practices. The CAIT adds that these companies will now try to circumvent the policy so as to gain an unfair advantage.
In this regard, the CAIT has written a letter to Union Minister of Commerce Suresh Prabhu drawing his attention to the following points:
a. Circumvention of Policy by Amazon
It is reported that Amazon is trying to circumvent the policy be reducing its stake in Prion thus disassociating itself from Cloudtail which will be a seller on e commerce portal. It is nothing but circumvention of the policy and to defeat the intention of the Government to make e commerce market an even level playing field and good for fair competition.
Therefore, implying the letter and spirit of the policy and the intention of the Government, it is to clarify that online retailers should not hold direct as well as indirect stake, in its vendors. The intention of the policy is being tried to be defeated by Amazon through jugglery of language of which such global e Commerce players are masters.
We reject such kind of circumvent of policy and jugglery of language by Amazon & others to defy the policy. Misconstrued conclusions drawn to their own benefit for flouting the norms and policy will not be accepted at all. We urge for your immediate intervention in the matter before it’s too late. If Amazon is allowed to circumvent the policy, soon others will follow the same making a mockery of the Govt and its policies. Therefore immediate steps are needed from the Govt.
b. Rules should be applied to domestic e commerce players
On the other hand, the domestic e Commerce players stand in an advantageous position since FDI restrictions are not applicable on them which means the dirty practices including predatory pricing, deep discounting, exclusivity and loss funding will be adopted by domestic players leaving the intention and restrictions meaningless. Again the traders both offline and online will be the worst sufferers.
Under the circumstances and with a view to provide an even level playing field for all sorts of stakeholders, it is necessary that restrictions stipulated in FDI policy for e commerce should invariably be imposed on domestic e Commerce players as well.
In the absence of any policy or rules for domestic e commerce players, several big corporate houses are now more inclined to open e commerce portals and enter the market. The Indian retail Trade Accounts for annual turnover of more than 42 lakh crore of rupees and corporate houses will certainly want to capture major stake via e commerce.
The letter urges the Government to preserve sanctity of the policy and to implement the same in its true letter and spirit without any discrimination.
It further states that a delegation of CAIT wishes to call upon the minister to discuss the matter in person and requests that an appointment be granted.