The Confederation of All Traders (CAIT) on Tuesday has written to Prime Minister Narendra Modi, urging immediate action against e-commerce companies. The domestic traders' body alleged that ecommerce companies, prominently Flipkart and Amazon were flouting existing FDI norms and treating India like a "banana republic".
The letter from CAIT also alleged that ecommerce companies had the "hidden agenda to control, dominate and monopolise not only the e-commerce but even the retail trade of India" and that these companies were intent on "displacing the small traders" within the country.
The explosive letter from the body is the latest in a long line of complaints from the association against large ecommerce entities, especially Amazon and Flipkart. Just last month, the association had sent another letter to the government urging legal action against Walmart-owned Flipkart for flouting FDI norms.
According to the rules laid down by the government on FDI on e-commerce, e-commerce entities with FDI cannot operate on an inventory-based model. Under this model, e-commerce entities own the services and goods that they are selling on the platform.
CAIT has regularly accused Flipkart and Amazon of flouting these rules through “creatively structuring its marketplace business model and creating a facade in order to exercise control over inventory and retail prices."
The letter is part of CAIT’s ‘e-commerce purification week’, which started on June 14. The movement was aimed at ‘purifying’ India’s e-commerce scene from alleged unethical practices like predatory pricing, deep discounting, loss funding, controlling inventory, and adoption of preferential sellers by foreign-funded e-commerce platforms.
Amazon and Flipkart are currently facing probes from the Competition Commission of India for alleged anti-competitive practices. While the companies moved the Karnataka High Court to stop the probe, the HC ruled against the e-commerce companies and allowed investigations to continue.
The move was celebrated by many traders' associations, including CAIT.
In its latest letter, CAIT states that “traders of India are not against e-commerce”. CAIT reiterated that their issue remains with the flouting of regulations, and unethical practices conducted by other e-commerce entities.
"We stand strongly against unethical business practices and violation of the law. The trading community is committed to ensure that sovereignty (sic) of businesses in India should not be compromised and no power or entity should pose a challenge based on unethical business practices."
First Published: IST