NEW DELHI: The observations of the Parliamentary Standing Committee on Finance that e-commerce companies are adopting anti-competitive practices which needs to be checked before they monopolies the market truly reflects the current scenario of e-commerce business in India and corroborate stance of the Confederation of All India Traders & others that if well codified rules are not enforced in India for for e-commerce, the foreign e-tailers will emerge as second edition of East India Company posing a major threat to trade & commerce activities being conducted by crores of small traders in the Country-said CAIT Secretary General Praveen Khandelwal while addressing a Press Conference today at New Delhi.
Khandelwal joined by Kailash Lakhyani, Chairman, All India Mobile Retailers Association (AIMRA) and Mr. Sridhar, President, South India Organised Retailers Association (ORA) said that e-commerce trade in India is like an orphan or unwanted child since even being one of the important vertical of retail trade which is fast growing is devoid of any rules & regulations giving ample advantage to foreign e portals to make the e-commerce landscape as an open playground for their game of valuation and not doing the trade.
Calling it enough, the trade leaders declared to form a wider forum of national organizations of different products for impressing upon the Government immediately roll out the long pending e-commerce policy and Consumer Protection Rules pertaining to e-commerce. It is not a secret now that the foreign e-tailers entered India with a single vision of earning for themselves and vested interests of driving silent agenda to control & dominate both e-commerce & retail trade of India even at the cost of violation of rules and the policy. A varied warfare of sabotaging the backbone of the most populous countries of the world is the real mandate of these companies.
Khandelwal and others said that much before the report of Parliamentary panel, the Competition Commission of India, various High Courts and the Supreme Court have found these foreign e-commerce companies guilty in various cases.
Several government agencies are investigating against them. Banned items like acid, raw material for making bombs, ganja etc are being sold through the portal of these companies but we have failed to understand Why are these companies still being given a chance to do business in the country in the manner of their choice ? Why strict action is not being taken against them? Why they have been given opportunity to spend time in the name of investigation? Are these companies above the law of the country?
The trade leaders said that unruly e-commerce activities by foreign e-commerce companies have greatly destroyed more than 40 verticals of retail trade and the worst among them is mobile trade. Over 50000 mobile retail stores have shut down over a period of last few years and many more are on verge of shutting due to non availability of stocks in the retail, due to situations emerging out of the unethical collusive activities of the foreign e-commerce players and Brand owing companies.
Exposing the business model of these companies, the trade leaders said that these platforms have today become modes to evade taxes by their way of operations. The primary selling of the goods is done online backed by supplies in retail through unauthorized alternate channels.
The economy of any country runs on the rotation and cash flow in the market which passes from several chain of hands to generate taxes and these platforms in the name of digitalization have used the gaps to reach the end user killing the middle hands of the Distribution, Stockist, Retailers and customer mineralizing the opportunity to earn incremental GST which could have not been possible in case of pure retailing with the robust GST System. The other trade verticals which have been greatly destroyed include FMCG, grocery, consumer durables, electronics, readymade garments, fashion apparels, food grain, gift items, luggage, cosmetics, fashion apparel’s, watches etc.
The trade leaders strongly alleged that an unholy nexus of e-portals, brands and banks including Government banks is operating in e-commerce for creation of monopoly of foreign e-commerce companies and helping them to continue their anti-competitive business practices. These platforms by way of their technology prowess and power to burn money have forced brands today to walk hand in hand to capture their shares offers using exclusivity promoting anti-competitive environment in the retail pulling the customers towards the online.
Employment generation remains the key to the per capita income of the country, but this digital ecommerce has badly impacted the employment opportunities and shutting of stores has left thousands jobless and further impacting the brands to layoff as recently openly being experience in most of the telecom industry. Over 5 lac families were impacted due to the shop closures and layoffs.
The trade leaders further said that there is a myth that online will drive adoption of the digital economy of Country over offline trade in the Country which not only can educate and deliver experience which is vital for the adoption and penetration of 5G speed. For instance, smartphone user base grew from 91 million in 2011 to 930 million in 2022.
The rate of growth in the coming years will be challenged if not focused from the retail channel. To drive the upgrade into 5G from a current base of 600 million in 4G & 220 million in 2G shall remain a herculean task and shall only be possible with the offline retail who can educate and drive to achieve fast output.
Khandelwal and other trade leaders released a 6 point charter on e-commerce which demand the Government to immediate roll out a robust & strong e-commerce policy, formation of a Regulatory Authority for E Commerce, immediate release of e-commerce rules under Consumer Protection Act, issuance of a new Press Note in place of Press Note 2 of 2018 of FDI Retail Policy, simplification & rationalisation of GST taxation system and rolling out of National Retail Trade Policy.
The CAIT in association with thousands of trade associations across the Country has decided to continue with its strong aggressive campaign all over the Country against high handedness of foreign e-commerce companies and will not sit idle till the Government takes desired action.