Traders’ bodies on Tuesday demanded the setting up of an independent regulatory body for digital commerce for oversight and holding accountability on e-commerce and quick commerce platforms.
At a conclave in New Delhi, The Confederation of All India Traders (CAIT), All India Mobile Retailers Association (AIMRA), All India Consumer Products Distributors Federation (AICPDF), and Organised Retailers Association (ORA), collectively alleged anti-competitive practices like predatory pricing, deep discounting and exploitation of gig workers.
These also sought a faster roll-out of the National e-Commerce Policy and e-Commerce rules under the Consumer Protection Act. Both of these are currently being finalised by the Centre.
In a statement, the traders also recommended an imposition of a “luxury tax” under the prevailing GST framework on goods sold via e-commerce platforms, arguing that the practice of buying goods online should be considered a “luxury”.
Currently, the goods and services are taxed under a four-tier tax structure with slabs at 5, 12, 18, and 28%.
The traders also said that the quick commerce platforms have been violating FDI norms.
“Instead of creating infrastructure or supporting the retail economy, FDI is being used to finance losses, destroy small shops, and capture control over the supply chain,” Praveen Khandelwal, CAIT Secretary General and Member of Parliament, said.
Dhairyasheel Patil, National President, All India Consumer Products Distributor Federation (AICPDF), said that these companies have received over Rs 54,000 crore in FDI, yet only 2.5% has gone into infrastructure.
“They are not marketplaces—they are inventory-led companies operating in disguise,” he said.
The traders’ body also recommended the prohibition of inventory-led operations by e-commerce platforms posing as the marketplace.
As per existing rules, 100% FDI is allowed through an automatic route in the marketplace model of e-commerce. However, overseas investment is not permitted in an inventory-based model.
In the marketplace model, e-commerce entities can only provide a platform for third-party sellers and they cannot own the inventory. They also cannot directly or indirectly influence the price of the goods.
The CCI is already looking into alleged anti-competitive ways of e-commerce companies. These bodies also declared a nationwide campaign starting May 1.
“We will not remain silent. Local trade associations in every city and state will rise to defend India’s retail democracy,” said BC Bhartia, CAIT National President.
He said that a strategic road-map will be released at CAIT’s National Governing Council Meeting in Bhubaneswar on April 25–26.