Traders body wants study on impact of opening e-commerce to FDI

A day after Commerce Minister Nirmala Sitharaman met states' representatives on opening up the e-commerce sector to FDI, the Confederation of All India Traders (CAIT) wrote to chief ministers urging a detailed impact assessment on various stakeholders before taking the discussion.

"It is urged that before taking the discussion further, an impact assessment study be conducted," CAIT wrote to the states in a letter, a copy of which has been obtained by IANS.

"Such an impact assessment must study the impact of e-commerce in other nations also, and identify the negative fallout clearly in those nations," the industry body said.

It was agreed in Wednesday's meeting that states would give their views within 15 days on the matter.

"The government of India invited states to discuss the issue of FDI in e-commerce in B2B and B2C and also bringing FDI in multi-brand retail," Haryana Finance Minister Captain Abhimanyu told reporters after the meeting.

"But one consensus between the states and the Centre was there that whatever decision is taken, it must be taken after good deliberation and after engagement with stakeholders at state levels and after assuring ourselves that the interest of the consumers, small retailers as well as SME sector are protected," he said.

"All the states will give their views and comments on the matter within 15 days to the Centre," he added.

India allows 100 percent FDI in business-to-business (B2B) e-commerce, but not in B2C companies selling directly to consumers.

Describing India as an "e-Commerce dumping ground", CAIT said "the Indian government has an anti-dumping policy with a clear mandate to protect domestic trade and industry from such unfair trade practices."

Dumping occurs when prices are artificially lowered by accessing funds from overseas sources, government or otherwise.

"Under the umbrella of e-Commerce business in India, the e-retailers are selling products much below the actual price of the manufacturer. This is possible only because of funding received from overseas and is nothing but eCommerce dumping," the traders' association said.

Jammu and Kashmir Industries Minister Chander Prakash told reporters after Wednesday's meeting: "We have to be careful while introducing (FDI) in e-commerce".

"The FDI in e-commerce needs more debate and discussion. More meetings will be held on the issue. We will discuss the pros and cons in detail in our state. States ask for more time on the issue," he said.

Some states, including Tamil Nadu, are opposed to FDI in retail and e-commerce.

With retail store operators going to court seeking parity between online and offline retailers, Sitharaman met representatives from both e-commerce and retail companies on Friday to discuss the issue.

Almost all stakeholders, including from the Confederation of All India Traders (CAIT) and the Federation of Indian Chambers of Commerce and Industry were invited to the meeting.

"CAIT urged the government not to turn the Indian retail market into an e-commerce dumping yard by allowing FDI in e-commerce," its secretary general Praveen Khandelwal told IANS.

The Retailers Association of India, representing large brick-and-mortar retail companies, moved the Delhi High Court in May seeking a level playing field between online and offline retailers.