Multinational E-Commerce Players Violating FDI Rules, Alleges CAIT


Few multinational e-commerce entities with heavy arsenal of funding working in India have tried to flout the FDI norms, mentioned the merchants’ physique Confederation of All India Traders (CAIT). Releasing a white paper doc, the business physique mentioned: “The FDI Policy is put to multifarious interpretations and e-commerce entities structure their relationship as marketplace with sellers, in such a way that they are in a position to control either seller on their platform or the inventory and also escape the scrutiny of the enforcement agencies.”

“Under the guise of such control or ownership over sellers, the issue also permeates from being a mere FDI policy violation to also being an anti-competitive conduct.”

“The mitigating measures and strict action for enforcement of the law in letter and spirit are of paramount importance. Otherwise, the FDI Policy on e-commerce would fail in its very objective of catering to the interests of domestic manufacturers, traders, sellers, MSMEs, startups and creation of a level playing field in retail,” it talked about within the paper.

The definition of e-commerce, clearly capturing the position of a impartial e-commerce market and the MRBT retailer working in digital type is the necessity of hour, it instructed.

“To keep away from such battle of curiosity and comprise market distortions, it’s important that {the marketplace} platform should act in a impartial method and should have no relation with sellers (whether or not by shareholding, management or in any other case, immediately or not directly) or management sellers registered on the platform as that results in market to performing as vendor itself, which is basically, the inventory-based mannequin of e-commerce.”

Further, it said neither a marketplace entity should act as an inventory-based e-commerce entity, nor should inventory-based e-commerce entities act as a marketplace entity.

Also, an e-commerce regulator should be set up and it should be commissioned to look into unfair trade practices of both end consumers as well as the intermediate consumer such as sellers on the platform, it said.

“Protection of the fitting to free and honest commerce must be ensured for a number of small sellers who look ahead to e-commerce platforms for his or her livelihood and shoppers who’re equally depending on such platforms for his or her wants,” it said, adding that a mandatory GST registration for conducting e-commerce activities should be abolished.

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