 "CAIT's White Paper details violations by Amazon, Flipkart; calls for action")
In response to the recent report from the Competition Commission of India (CCI), the Confederation of All India Traders (CAIT), in collaboration with the All India Mobile Retailers Association (AIMRA) on Tuesday published a White Paper that highlights the significant impact of e-commerce giants Amazon and Flipkart on India’s retail sector.
The White Paper focuses on the violations committed by these companies, particularly regarding the Foreign Direct Investment (FDI) policy and other regulatory frameworks governing e-commerce.
During a speech to mobile trade leaders, Chandni Chowk MP and CAIT Secretary General, Praveen Khandelwal, urged traders across the country to actively resist the unethical business practices of e-commerce giants that are undermining Prime Minister Narendra Modi’s vision for the growth of domestic trade. He added that the time had come for the trading community to firmly challenge the strategies employed by these companies to dominate India's retail market.
Khandelwal referenced recent warnings from Union Commerce Minister Piyush Goyal and Union Finance Minister Nirmala Sitharaman, who had cautioned these companies to abandon their ulterior motives and called upon them to contribute towards creating a level playing field. He pointed out that the CCI report corroborated the allegations CAIT and others had raised approximately four years ago. Khandelwal called for the CCI to take swift action against these companies in accordance with the law.
The White Paper’s findings serve as a wake-up call for authorities, illustrating how Amazon and Flipkart have "repeatedly flouted" FDI regulations designed to maintain fair competition for domestic retailers. These companies, through preferential treatment of select sellers, deep discounting strategies, and exclusive product launches, have distorted the retail market, severely affecting small and medium-sized retailers nationwide, it said.
Key CCI findings against Amazon & Flipkart
- Preferred sellers
- Preferential listings
- Exclusive product launches
- Deep discounting
CAIT and AIMRA have demanded immediate and strict measures be taken against Amazon and Flipkart for their flagrant violations of the FDI policy and regulations. The retail community is calling on the government to intervene and implement corrective actions to protect Indian retailers and uphold the principles of fair competition. The violations include:
- Major impacts of these violations
- Market monopolisation
- Lack of price control
- Misuse of FDI
- Customer data breaches and manipulation
- Collusion with original equipment manufacturers and grey market activities
In their White Paper, CAIT and AIMRA have proposed several recommendations for policy and regulatory action, including:
- Immediate introduction of e-commerce rules under the Consumer Protection Act.
- Immediate suspension of business operations for Amazon, Flipkart, and their affiliates, with reinstatement only upon compliance with the rules and laws.
- Development of a robust policy framework to close regulatory loopholes, ensuring fair competition and consumer protection.
- Establishment of a fast-track system, led by an ombudsman, to resolve consumer complaints and prevent deceptive practices with timely intervention.
- Discounting GST input credits for B2C e-commerce transactions to reduce tax evasion and prevent revenue loss.
- A ban on exclusive cash-back offers, which encourage grey market operations, would help restore fairness in the market.
- Suspension of sales platforms that facilitate manipulation and collusion until these issues are resolved.
- Introduction of a luxury tax on high-end products sold via e-commerce platforms, levelling the playing field between online and offline retailers.
According to the White Paper, this is a pivotal moment for India’s retail sector. Any delay in addressing these issues could lead to irreversible harm to the nation’s economy and retail ecosystem.