Traders, RSS-affiliate slam govt on 100% FDI in e-commerce

CAIT Chief said govt is behaving like kings, not as democratically elected representatives of the people

The traders’ lobby and Rashtriya Swayamsevak Sangh (RSS) affiliates such as the Swadeshi Jagaran Manch (SJM) on Tuesday slammed the government’s move to allow 100 per cent foreign direct investment in the marketplace model of e-commerce under the automatic route.

They said the decision has effectively allowed foreign direct investment (FDI) in multi-brand retail, which the Bharatiya Janata Party (BJP) had opposed when in the Opposition.

The Confederation of All India Traders (CAIT), an umbrella body of small traders and businessmen, termed the development “extremely unfortunate”, while the SJM said the decision was “really shocking”. Both said the move would negatively impact not just traders and businessmen but also the micro, small and medium enterprises (MSME) sector. Traders and small businessmen have traditionally comprised a key support base of the BJP.

CAIT said it was “ironical” that Prime Minister Narendra Modi spoke frequently of empowering small businesses but his government was weakening them by a series of decisions — allowing FDI in food processing, levy of excise on jewellery and garments and allowing 100 per cent FDI in e-commerce.

“This is nothing but backdoor entry to global retailers that will allow them to sidestep restrictions in multi-brand retail as ecommerce has no geographical restrictions,” CAIT Secretary General Praveen Khandelwal said.

Ashwani Mahajan, co-convener of the Manch, said: “We had been demanding the government put a stop to this illegal way of bringing FDI by circumventing the law of the land. That has now been legitimised. This is a step in the wrong direction and will impact small traders and businessmen.” Mahajan said it was “astonishing” that the government had gone ahead with the decision without any discussion with various stakeholders on defining a marketplace. CAIT claimed there were 60 million business enterprises involved in retail trade in India with as many as 460 million people dependent on retail trade for their livelihood. It said the sector contributed 45 per cent to India’s gross domestic product, with an annual turnover of ~39 lakh crore. According to CAIT, the MSME sector in India contributed 9 per cent to GDP, accounted for 36 per cent of the total value of exports and provided employment to over 80 million people through more than 36 million enterprises, and it has been growing consistently above 10 per cent for the past five years.

CAIT’s Khandelwal said the decision proved that a “U-turn government” was in power. “They are behaving like kings and not as democratically elected representatives of the people. This move is extremely insensitive to the Indian trading community,” he said.

CAIT said FDI in retail in e-commerce would also distort the taxation system as e-retailers will be registered with the taxation department of one state but entitled to trade across the country without registering with tax authorities in other states, and will be free to deliver material in other states.

However, traders or MSMEs need to obtain separate registration in each state if they wish to conduct business activities in more than one state.

CAIT said it was convening an emergency meeting of its national governing council to take stock and decide a strategy.
NOT SO HAPPY...

• CAIT termed the development “extremely unfortunate”
   
• SJM said the decision was “really shocking”
   
• 60 million business enterprises involved in retail trade
   
• 460 million people depend on retail trade for their livelihood
   
• The sector contributes 45 per cent to India’s gross domestic product
   
• MSME sector in India contributes 9 per cent to GDP