The Confederation of Indian Traders on Wednesday urged the government not to heed to the demands by e-commerce companies and agencies from the U.S. to water down or delay the implementation of the recently-announced foreign direct investment (FDI) rules in e-commerce.
“As a body that represents seven crore small businesses and 40,000 trade federation, we strongly oppose any changes,” Praveen Khandelwal, national general secretary of CAIT, said at a press conference. “To accede to their demand is not good for the trading community.”
This comes against the background of reports of intense lobbying by the e-commerce companies to ensure that the FDI rules are amended. The rules mandate that no entity in which an e-commerce company has stake can sell its wares on that e-commerce company’s portal.
Any vendor who receives 25% or more of its inputs from an e-commerce group company cannot sell on that e-commerce portal. These rules, which are to be implemented from February 1, are expected to adversely impact Flipkart and Amazon, who have considerable stake in vendors operating on their respective platforms.
“We want the government to institute a thorough probe into the business activities of these players in the last 2-3 years,” Mr. Khandelwal added. “They should be strictly penalised if any violation found.”
Mr. Khandelwal said that any move to dilute the rules or push back the implementation date would be met with stiff resistance from the trading community and also a nationwide agitation to protest this.
The CAIT also called for the implementation of these FDI norms to apply to domestic players as well in order to ensure a level-playing field and promote competition.