The Confederation of All India Traders (CAIT) says that malpractices by e-commerce firms like Amazon, Flipkart will prove to be extremely fatal for India’s retail trade.

Trader body CAIT launches 2-month nationwide agitation against Flipkart Amazon
Atom E-commerce Monday, November 11, 2019 - 12:42

Stepping up its fight with e-commerce players in the country, the Confederation of All India Traders (CAIT) has launched a nationwide agitation against Flipkart, Amazon and other e-commerce companies, who it claims are circumventing the law and abusing Press Note 2 of the FDI policy.

This, CAIT claims, was echoed by trade leaders from across 27 states in the country at a National Traders Conference held by CAIT in New Delhi on Sunday.

The two-month protest will begin on November 13 and continue till January 10, 2020.

Several trade associations across the country, including All India Mobile Retailers Association, All India Consumer Products Distributors Federation, Federation of All India Aluminium Utensils Manufacturers, All India Association of Electronics Merchants Association, Toys Association of India, Drug Dealers Association of India, Federation of Electrical Goods & Appliances Association, Federation of Hardware Manufacturers & Traders Association, and others will also be a part of this agitation.

The CAIT, along with other trade unions, has been locking horns with e-commerce players for over a year now over deep discounting, predatory pricing and unfair practices. They claim that e-commerce players have a hold over inventory through sellers controlled by them.

CAIT says that this agitation is a bid to protect the retail trade of India from onslaughts of e-commerce companies, “whose malpractices including predatory pricing and deep discounting will prove to be extremely fatal for the retail trade of India.”

The traders have also urged Prime Minister Narendra Modi and Commerce Minister Piyush Goyal to ensure that law and policy should be equal to all and must be followed in its true letter and spirit.

“When the traders of the Country are penalised even for a slight mistake and immediate action is taken against them by the concerned Authorities, then why no action has been taken against Amazon, Flipkart and others for brutal, open and continuous violation of FDI policy of the Government. It’s a matter of investigation as to how these companies are able to continue their business in spite of suffering (losses of) thousands of crores of rupees every year,” Praveen Khandelwal, general secretary of CAIT said.

“It is deeply regretted that in spite of making complaints, the Government has not taken any action against them. The resolution further said that the Government should immediately order for a closure of their e commerce portal pending an investigation by an independent Authority in a time bound manner,” he added.

Traders also want the government to release the draft of National E-commerce Policy immediately and that trade representatives should be consulted before rolling out the draft. It has also demanded that a Regulatory Authority or an E-commerce Ombudsman should be constituted immediately to monitor and regulate the e-commerce market and should be empowered to take action against any entity for violation of the law and policy or adopting any unethical and unfair business practices.

FDI violation

In India, marketplaces which have been funded through FDI, are allowed to only make their platform available to third-party sellers. It bars these entities from holding any inventory or stock or selling their own goods to customers.

As per norms, if an online marketplace sources more than 25% of merchandise from any entity or seller related to it, that seller will be considered controlled by the marketplace. Marketplace operators are also barred from selling products of any of their group companies.

A recent report on Entrackr revealed that Flipkart is more of a retailer than an online marketplace.

Read: Flipkart bought goods worth Rs 39k crore in FY19: Why it violates India’s FDI norms

As per the report, financials of Flipkart’s Singapore parent Flipkart Private Limited show that in FY19, the company bought goods worth Rs 39,514 crore on its own to be further sold. A total of 81.75% of Flipkart’s operational revenue was generated through sales of goods on Flipkart.com.

What this indicates is that Walmart-owned Flipkart, instead of being a pure marketplace, has been acting like a retailer by buying and then selling goods on its platform.

This is one of the major issues that CAIT has been flagging with the government, for months now.

CAIT’s action plan

As part of its two-month agitation, on November 13, the trader delegation across the country will submit a memorandum to all MPs of Lok Sabha and Rajya Sabha and will demand them to raise the issue in Parliament and urge the Government to take action against these e-commerce companies.

“A ‘National Protest Day’ will be held on November 20 and Protest Dharna will be organised in more than 500 cities of all states including state capitals. About 5 lakh traders are expected to take part in such protest. A "National Protest March Day" will be organised in more than 500 districts of the country where about 10 lakh traders will participate in ‘Traders March’ and will submit a memorandum in the name of Prime Minister to their respective District Collectors. A "National Traders Rally Day" will be organised in more than 1000 cities of different States and about 20 lakh traders are expected to be a part of such rallies. The CAIT delegations will also submit a memorandum to Chief Ministers of all states on the same day,” CAIT said in a statement.

The first phase of the nationwide agitation will conclude with a three-day National Traders Convention to be held from January 6-8, 2020 at New Delhi, which will be attended by trade leaders of about 20,000 trade associations from all over the country.

Also read: Will take action against Amazon, Flipkart if found violating e-comm norms: Piyush Goyal

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