Retailers warn of legal action on e-commerce

Retailers Association of India (RAI), one of many saying it is a representative body for the segment, says it will move court if online companies do not adhere to the guidelines on foreign direct investment (FDI) related to e-commerce marketplaces.

There arent many options left if the norms are not adhered to, said B S Nagesh, chairman.

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Kishore Biyani, founder of the Future Group, said e-commerce companies such as Amazon and Big Basket were flouting the norms despite the recent clarifications. ''Big Basket is totally illegal in its operations," he said. "Entities backed by foreign funds are doing business freely but we (brick and mortar retailers) are not allowed to get FDI in the business."

On March 29, the Union govenment said it would allow 100 per cent FDI in e-commerce marketplaces but none in inventory-based businesses. The guidelines put a cap of 25 per cent on every vendor's sale on a marketplace platform. And, that marketplace platform owners should not influence the sale price in any way.

"It does not make sense if the clarification is not implemented in letter and spirit," said Rakesh Biyani, joint managing director at Future Retail.

Alok Gupta, MD, The MobileStore, said many e-commerce marketplaces have e-wallets and offer discounts through these. "It should be checked whether dealings through e-wallets result in influencing the price."

RAI chief executive Kumar Rajagopalan said enforcement of the norms would encourage a good eco-system in technology and retail brands.

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