New Delhi: The Confederation of All India Traders (CAIT) said in a letter to Union Trade Minister Piyush Goyal that foreign entities such as Amazon and Flipkart tend to mercilessly indulge the Indian retail sector with their deep pockets and extensive lobbying of legal experts. destroy. nothing before trampling on the lives of more than 40 crore Indians.
CAIT sent in a statement to Goyal that FDI in the e-commerce section of Persnote 2 of FDI Policy 2016/2018, the provisions of which foreign entities such as Amazon and Flipkart are hell-bent on mercilessly destroying the Indian retail sector with their deep pockets and extensive vestibule of legal experts that will stop nothing before they trample the lives of more than 40 Indians.
‘This is nothing more than a day robbery where expressive prohibitions of press note 2 are grossly and blatantly violated by such foreign entities who are distracted with their ulterior motives to implement their hidden agenda to not only control and dominate the e-commerce industry . but also the retail trade in India in a very clandestine way, ”he said.
CAIT said that these foreign entities deliberately violated every line of press note no. 2 as a banana republic, instead of adhering to the provisions of the press note both literally and enthusiastically to respect the law of the land.
In such a gloomy situation and especially in the aftermath of the current e-commerce industry, the government has a duty to protect the sanctity of the laws, rules and regulations regarding FDI in e-commerce and thus the need for a new and fresh press note replaces press note no. 2 of the FDI policy is a need for the hour.
The loopholes of the current policy are being exploited by foreign e-commerce giants like Amazon and Flipkart so that these loopholes are properly plugged in and the policy is implemented according to its original intent.
CAIT said such controls enable them to do exorbitant pricing, deep discounting and preferential treatment of sellers, with capital dumping by their subsidiary sellers. All this is done to gain market share and make illegal financial gains at the expense of the life business of 8.5 retailers, their dependent families and employees.
To circumvent the constraint imposed by the e-commerce market model is a common practice used by these giant foreign e-commerce companies, to create subsidiary companies as sellers, in such a way that they through the way of equity and / or economic participation by their parent / group companies without falling strictly under the definition of ‘Group company’ in FDI policy.
To stop these loopholes, CAIT has demanded to include key points for the issuance of a new press release on FDI policy in e-commerce. To clearly demarcate the boundary between ‘market model’ and ‘stock-based model’, any type of direct / indirect, equity or economic relationship between ‘e-commerce entity’ and ‘seller on its platform’ should be prohibited. . For this purpose, any type of relationship between ‘market entity’ and ‘Seller’, whether direct or indirect, fair or economic or otherwise, must be strictly prohibited.
Such prohibited relationship between Marketplace and Seller may include, but is not limited to, group companies, subsidiaries, affiliates, associates, beneficial owners or any other person (s) who may exercise such control.
It is also proposed that an e-commerce market based model would mean a digital platform for information technology by an e-commerce business to act only as a facilitator between buyer and seller.
An inventory-based model of e-commerce would mean an e-commerce activity where inventory of goods and services is owned by e-commerce businesses and sold directly to consumers.
The e-commerce market entity and its group businesses will not directly or indirectly own the stock, that is, goods or services that pretend to be sold on the market. Such ownership or control of their inventory will transform the business into an inventory-based model.
Marketplace entity and its group businesses may not directly or indirectly sell stock of goods or services that pretend to be sold on the market to the sellers. If any goods or services sold by the Group companies of the market and resold on the e-commerce platform, such activities will be considered as inventory-based model of e-commerce, CAIT said.
The seller who owns or controls his stock through the Group Enterprises of the e-commerce entity may not sell his goods or services on the market. An inventory of a seller on the market will be deemed to be controlled by an e-commerce market entity if such seller buys his stock, which is allegedly sold directly or indirectly on the market, from his Group companies. In addition, each market and its affiliates, group companies, associates, at prescribed intervals or from time to time must provide all details, information, documents, statements and returns as required by the Government or any Regulator, in order to comply with the provisions of these guidelines, said CAIT.
Source: Telangana Today