By Influencing the pricing of products, E- commerce giants are violating many norms under FDI policy: Confederation of All India Traders (CAIT)

In a rush to capture the retail market, top e-commerce firms are putting all their might and resorting to the practices that are unethical and violate the norms of Foreign Direct Investment (FDI) policy which is affecting the profit margins of local traders adversely.

 

CAIT, which has been campaigning against Amazon and Flipkart for years, In a letter to the Prime Minister alleged the unethical business practices by them,  “the absence of concrete action against e-commerce companies has led to a roadblock for small businesses to run their operations online,” read the letter.

 

However, Amazon and Flipkart claim to  have been working completely in compliance with the FDI laws.  

 

last year  Department of Consumer Affairs had noted under Consumer Protection (e-commerce) Rules, 2019, e-commerce companies should not directly or indirectly influence the price of products by ways of  adopting methods that may influence ‘transactional’ decision of customers, false reviews,  etc and that they should display contract terms between them and their sellers with respect to returns, refunds, exchange, delivery, payments, grievance redressal, etc.  

 

It appears to be the case that e-commerce giants are controlling the inventories of sellers and SMES directly or indirectly and also creating roadblocks to  small online businesses by adopting malpractices to influence transactional decisions of customers.

Cover image by Quartz