CAIT calls for early introduction of e-Commerce policy

Business Bureau,

The Confederation of All India Traders (CAIT) has called for early introduction of e-Commerce Policy in the country in wake of the fact that festive season of this year is to began from October 15. In absence of any policy , the e-Commerce portals will play their dirty game of predatory pricing, deep discounting and loss funding and will vitiate the e-Commerce market of the country. CAIT has also asked Union Commerce Minister Suresh Prabhu to restrict preferred sellers of e-Commerce companies to sell products on e- Commerce portals since these preferred sellers are instrumental in all sorts of malpractices.

Government has already issued first draft of e-Commerce Policy and a Group of Secretaries is already in process of examining the draft of e-Commerce Policy. In light of the same,  B C Bhartia, National President of CAIT said, there are important provisions on data localisation and checking abuse of FDI which should be remained in the policy to check unauthorised infiltration of goods through e-Commerce.

“The provision for a separate section of ED for looking into Press Note 3 related violations is good but the question must be raised about what is happening with current violations that are very much open and known and whether they will be employed to stop malpractice. Making sure that FDI based e-Commerce companies do not violate Press Note 3 provision is more important,” he said.

The biggest concern for traders would be proposal to allow up to 49 per cent FDI in inventory model based businesses as long as the products are 100 per cent Indian made, and ownership controls remain Indian. Such a provision is back door entry of MNCs in retail trade of India and must be scrapped. The traders will never accept such a provision under any circumstances.

Bhartia said that though draft policy speaks of a new regulatory body, its remit/ functions do not seem to include adjudicating between sellers and platforms, and other matters of relationship between them. The provision requiring e-com companies to make their terms and conditions with vendors public is useful, as also the requirement to State upfront the purposes for which data is collected. “Right to examine software and source code for effective regulation is a good step as this provisions will make sure that foreign companies properly pay taxes in India. Enhancing limits of exports or imports through couriers beyond 25K is a concern for traders,” he pointed out.

Re-examining the intermediary protection under I-T Act is a positive move. Also mandatory registration of all e-com companies. Also amending threshold limits for competition commission’s investigation can be used against foreign e-com companies undertaking mergers and acquisitions.

Bulk needs to be defined: Khandelwal

Bulk purchases of branded goods like mobiles by related parties that distort prices will be banned and Press Note 3 injunction against price influencing will be extended to group companies are needed provisions but the bulk needs to be defined, said Praveen Khandelwal, Secretary General of CAIT. However, the very fact that related parties and group companies are used to violate the letter and spirit of Press Note 3 is not mentioned and must be included in the policy.
He said, “There are no provisions to improve technical abilities of small traders, to help them digitalise, to set up e-com platforms in cooperative or similar public interest modes where small traders can sell goods but on their terms, and preserving their best interests,” he said. Government should not simply “accept” or “be reconciled” that with e-com coming in many/most small traders will simply have to disappear, which appears to the approach — because while proactive measures are taken to preserve the interests of MSMEs and for Indian digital industry, none exist for small and medium traders. “This is the major problem in the policy approach which must be corrected. For doing this, a sub group on small and medium traders should be formed and submit their report, recommendations which should be included in the main draft before it is made public,” Khandelwal demanded.

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