Govt must act tough to check online retailers, says traders’ body
A traders’ body has asked the government to restrict e-tellers such as Flipkart, Amazon and Snapdeal from carrying out festive sales, saying that such activities are against the FDI policy. The Confederation of All India Traders (CAIT) wrote a letter to Finance Minister Arun Jaitley and Commerce Minister Nirmala Sitharaman and urged them to take appropriate action against these e-commerce companies for circumventing the law. “These companies claim to be a marketplace and therefore can provide only a technology platform for the sellers who are registered with them. Since ownership of inventory does not hold by the said companies they can’t offer ‘sale’ or ‘discounts’ in totality on their online portals,” CAIT said. CAIT President B C Bhartia and Secretary General Praveen Khandelwal said that FDI norms restrict e-commerce companies from engaging in B2C (Business to Customer) trading. CAIT termed Amazon’s Great Indian Festive Sale and Flipkart’s Big Billion Day Sale from October 13 to October 17, and Snapdeal’s Electronics Monday Sale on October 12 as violation of FDI policy. “100% FDI is allowed in Business to Business (B2B) e-commerce and not in retail trading. Existing restrictions on FDI in domestic trading would also be applicable to ecommerce,” the trade body said in a statement. It said that since these companies have solicited general public into their respective sales by big advertisement campaign on print, electronic & social media; and since they have received foreign investment as such they are allowed to undertake B2B (business to business) ecommerce activities and not B2C (business to consumers); “advertisements addressed to the public in general tantamount to retail trading.” Even sales which will be materialised on these e-commerce portals would be made to direct consumers and not to any business establishment. “Therefore, by receiving FDI in their business format, they are doing B2C which is a violation of FDI policy,” CAIT said.
October 12, 2015 | 6:12pm IST.
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