Domestic, foreign e-commerce players should be treated alike: Cuts International

IANS, January 06, 2019

The government needs to create a level-playing field for both domestic and foreign e-commerce platforms through a comprehensive e-commerce policy, said Pradeep S. Mehta, Secretary General, CUTS International on Sunday.

He noted that the current norms for the segment are applicable to foreign online retailers and this might create a discriminatory environment towards the domestic players.

“The government may not be wrong in its clarificatory policy on Foreign Direct Investment (FDI) in e-commerce, as it was a case of backdoor entry in multi-brand retail trade. But vital issues remain to be resolved to promote healthy economic democracy”, said Pradeep S Mehta, Secretary General, CUTS International.

“However, the issue of creating a level-playing field between domestic and foreign players in retail sector is yet to be resolved, for which a comprehensive National E-Commerce Policy is need of the hour”, he said.

The Department of Industrial Policy and Promotion (DIPP) recently had said that 100 per cent FDI is permitted in the market place model of e-commerce and not in the inventory-based model or the multi-brand retail segment.

The Commerce Ministry in December revised the FDI policy for e-commerce players whereby it barred online retail firms such as Amazon and Flipkart from selling products of companies in which they have stakes. It also prohibited e-tailers from mandating any company to sell its products exclusively on its platform only.

Mehta said: “The new guidelines are stricter for e-commerce companies with FDI providing marketplace, but there are no such restrictions for companies without FDI.”

He also observed that there is no need for a separate regulator for the e-commerce segment.

“India does not need a separate regulator for e-commerce, which would be yet another parking place for retired babus who are generalists and turn into controllers.

Most of the malpractices adopted by e-commerce platforms, for instance, discrimination among its vendors, deep discounts etc, can be dealt by the Competition Commission of India. If need be, the Competition Act, 2002 can be tweaked for which the process is going on,” he said.

The Consumer Protection Bill, 2018, which is likely to be passed soon by the Rajya Sabha, also has specific provisions on e-commerce, he added.

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