Traders warn government against delay in enforcing new FDI norms

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SME Times News Bureau | 17 Jan, 2019
Traders' body Confederation of All India Traders (CAIT) on Wednesday urged the government not to accept the demand by e-commerce majors to delay implementing the new foreign direct investment (FDI) rules in e-Commerce, while acceeding to such a delay would result in the government losing the votes of small traders in the coming general elections.

At a press conference here, CAIT also demanded that the government make it mandatory for the e-commerce companies to obtain a compliance certificate as on March 3, 2019, and companies without such a certificate should face restrictions in operating their ecommerce portals.

"The major chunk of seven crore traders will not vote for them (government) because any extension or any change in the policy will run against the genuine interest of small traders," CAIT Secretary General Praveen Khandelwal said. "We will be compelled to launch an agitation if the government doesn't listen to us," he said.

e-commerce giants, Walmart-owned Flipkart and American multinational Amazon, have sought an extension of the FDI implementation deadline of February 1 on the grounds that the changed regulations require extensive restructuring of their business model.

"The companies should not be allowed to raise funds until compliance certificate is obtained. Already companies have circumvented law by converting the marketplace to an open market for B2C (business-to-consumer) business, which is against the FDI policy and its letter and spirit," Khandelwal said.

"We will be compelled to launch an agitation if the government doesn't listen to us."

As per the new norms, online marketplaces like Flipkart and Amazon have been barred from selling products of companies where they hold stakes and the government has also banned exclusive marketing arrangements that could influence product prices.

CAIT pointed out that the norms are being flouted by foreign e-commerce majors and said that the FDI regulations related to e-commerce companies should be implemented on domestic online players as well to check their adopting any unethical business practices.

"It was clear from modus operandi that these market places were probably hoping that these infringements would be ignored once the operations become the norm," Khandelwal said.