Home / News / India /  Trade bodies meet DPIIT over FDI in e-commerce

India’s top trader and retail association that represent scores of small and large retailers on Wednesday met with the Department for Promotion of Industry and Internal Trade (DPIIT) to discuss issues pertaining to the Foreign Direct Investment (FDI) policy for e-commerce sector as part of the ongoing industry consultations.

Trade bodies sought to ensure that the e-commerce sector works in the true spirit of the law and rules.

Retailer’s Association of India (RAI) said it has recommended that the FDI rules applicable to retail should be the same across channels and formats of retail to facilitate consumer experience and ensure a level-playing field.

“Also, the rules for products should be same for all channels with no special rules or dispensation for any channel," RAI said in a set of recommendations presented to the DPIIT. RAI has over 6,534 members.

It also said that the policy needs to be implemented in letter and spirit—as FDI in retail in India is subject to various extant rules and regulations.

“These recommendations are congruent with RAI’s endeavour to ensure a conducive environment for growth of retail industry in India," RAI said.

On Saturday—a draft of India’s new e-commerce policy was released by the Department for Promotion of Industry and Internal Trade (DPIIT) at an inter-ministerial meeting. The policy document vastly extends the scope of regulation over the country’s growing e-commerce sector, Mint reported earlier. It has been subsequently opened up for further industry consultations.

Among other things, the draft wants e-commerce entities to “ensure equal treatment of all sellers or vendors registered on their platforms and not adopt algorithms that result in prioritizing select vendors". E-commerce in India is now governed by several regulations under various ministries, the draft policy makes it clear that a ‘holistic mechanism’ will be created to prevent anyone from capitalizing on this multi-ministry setup, causing delays to issues and address grievances.

Confederation Of All India Traders or CAIT, on the other hand said that the present policy, allowing 100% FDI in marketplace e-commerce platform and prohibits the FDI in inventory based model of e-commerce, is absolutely correct and in line with Government’s intent to protect the small merchants. The only issue for discussion is to enforce this policy in letter and spirit, it added in its note after the virtual meeting.

The trade body has also been seeking a formation of a regulatory authority to ensure action on violations such as deep discounting, preferential arrangements with sellers, by e-commerce majors.

“The government is preparing Press Note 3 and they are talking to stakeholders. So 7-8 trader organization were called by the DPIIT today to hear out what we have to say about the e-commerce sector. We think e-commerce sector is flouting laws on their whims and fancies. They say they are abiding laws but they are, for instance, doing preferential selling," said Dhairyashil Patil, national president, All India Consumer Products Distributors Federation (AICPDF).

CAIT in an update to the media after the meeting with DPIIT also said that: “The entities with FDI must ensure that they are engaged in a pure marketplace platform only. Any type of direct/indirect, equity or economic relationship, between an ‘e-commerce marketplace entity’ with any ‘seller’ on its marketplace platform should not be allowed. To remove any ambiguity, the definition of the inventory based model and marketplace model should be clarified," CAIT’s secretary general, Praveen Khandelwal said.

The Government should have the right to seek information and audit the accounts of the entities involved in e-commerce, Khandelwal said.

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