CAIT demands stringent enforcement of new e-commerce norms

Traders' body CAIT Thursday demanded stringent implementation of the guidelines for sale of products by e-commerce firms announced a day earlier, while pressing for a regulator to monitor the sector and act against companies flouting norms.

"The government has addressed a majority of issues raised by us through amendments to FDI Policy announced yesterday. The cashback sale, discounts, exclusive sales, etc. cannot take place under the new norms. We welcome the government's decision and believe that it should be implemented strictly," CAIT Secretary General Praveen Khandelwal told reporters here.

He alleged that e-commerce firms were openly flouting the Press Note Number 3 of the FDI Policy.

"If the revised norms are not enforced strictly, the outcome will be the same as that of Press Note Number 3. Therefore, we are demanding the formation of a Regulatory Authority empowered to act against companies flouting norms to monitor the e-commerce sector," Khandelwal said.

He reiterated CAIT's demand for the scrapping of the deal involving Walmart's acquisition of home-grown retail major Flipkart, adding that the traders' body will approach the Supreme Court if the NCLT's decision is not in its favour.

"We firmly believe the Walmart-Flipkart deal should be rejected. Our petition is pending in the National Company Law Tribunal (NCLT) and the next date of hearing is in January. If the NCLT does not listen to us we will approach the Supreme Court," Khandelwal said.

He also urged the government to introduce a comprehensive e-commerce policy at the earliest to address the disparities and anomalies in the sector.

The commerce and industry ministry notifies foreign direct investment (FDI) policies through press notes. Press Note 3, which was released in 2016, enlists guidelines for FDI in the e-commerce sector.

Tightening norms for e-commerce firms having foreign investment, the government Wednesday barred online marketplaces like Flipkart and Amazon from selling products of companies where they hold stakes and banned exclusive marketing arrangements that could influence product price.

The revised policy on foreign direct investment in online retail, issued by the commerce and industry ministry, also said that these firms have to offer equal services or facilities to all its vendors without discrimination.

The revised norms are aimed at protecting the interest of domestic players, who have to face tough competition from e-retailers having deep pockets from foreign investors, the ministry said.

These changes will come into effect from February 1 next year.

However, Khandelwal said the norms should be implemented with retrospective effect from April 1, 2018.

"In reality, e-commerce platforms in the country have been indulging in exclusivity, predatory pricing, deep discounting, loss funding, preferential treatment because of which small traders have been facing difficulties and an uneven level-playing field has been created," he alleged.

Khandelwal said the "modus operandi of MNCs to capture, control and dominate the retail trade of India through e-commerce" was adversely affecting the traditional retail trade of the country.