A major pushback against the fast-growing quick commerce industry is underway, with the Confederation of All India Traders (CAIT) proposing a “luxury tax” on purchases made through rapid delivery platforms such as Blinkit, Zepto, and Swiggy Instamart. The recommendation will be submitted to the Ministry of Consumer Affairs.
CAIT argues that the convenience of ultra-fast deliveries constitutes a premium service, and thus, should attract a higher tax bracket under the Goods and Services Tax (GST) regime. The demand was raised during CAIT’s national conclave in New Delhi, which focused on the impact of digital commerce on India’s traditional retail landscape.
The traders’ body also reiterated its long-standing call for the strict enforcement of foreign direct investment (FDI) norms and e-commerce rules under the Consumer Protection Act. It urged the government to implement regulatory safeguards for quick commerce platforms, including greater transparency in algorithms, pricing mechanisms, and seller selection.
Representatives from the All India Consumer Products Distributors Federation (AICPDF) and the Organised Retailers Association (ORA), who were also part of the conclave, joined CAIT in demanding protections for small retailers. According to AICPDF, over 10 lakh Kirana stores have reportedly closed down in the past two years, attributing the shutdowns to aggressive discounting and pricing practices by digital-first quick commerce firms.
“The way these platforms are expanding—unchecked and unregulated—is alarming,” said Dhairyasheel Patil, national president of AICPDF and senior vice-president of CAIT. “If this continues, we fear closures will only accelerate, as traditional operations become economically unviable.”
CAIT further alleged that current market practices by quick commerce firms are distorting fair trade, with some platforms using inventory-led models that allow direct sales, in violation of the existing policy framework for marketplaces. The organisation has called for an outright prohibition of such models and demanded that only third-party sellers be allowed to transact with consumers.
Additionally, CAIT proposed the formation of an independent regulatory authority for digital commerce to oversee both e-commerce and quick commerce businesses. The group also raised concerns over algorithmic opacity and the use of aggressive discounting strategies, which they believe are edging out small and mid-sized retailers.
In a related move, CAIT and affiliated organisations, including the All India Mobile Retailers Association (AIMRA), announced plans to approach the National Human Rights Commission to flag concerns regarding the welfare and working conditions of gig workers associated with these platforms.