- Friday, April 26, 2024
By: Shubham Ghosh
INDIA’S domestic traders’ body CAIT (Confederation of All India Traders) on Sunday (28) urged the central government not to dilute the draft of e-commerce rules under any kind of pressure from foreign-funded online firms.
In a communication to prime minister Narendra Modi, the body, which claims to represent 80 million retail stores, alleged that voices are being created to call the rules stringent.
“In the wake of expected pressure tactics of foreign-funded e-commerce companies against the draft of e-commerce rules…(we urged) him (prime minister) to ensure that no dilution is made in draft of e-commerce rules under any pressure,” the CAIT said in a statement. It added that the draft rules should be notified without further delay after examining the suggestions and objections.
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The traders’ body claimed that unethical law breaching business practices of foreign-funded e-commerce firms has forced the closure of a large number of shops across the country.
“Traders of India are not against e-commerce but are of the considered opinion that e-commerce is the most promising business avenue of the future, and traders should also adopt it as a stream of their business besides conducting business activities in their physical shops,” it said.
‘Proposed rules could create massive compliance burden’
Nangia Andersen LLP Partner Sandeep Jhunjhunwala said the proposed rules like appointing a chief compliance officer, a nodal contact person and a resident grievance officer may go a long way in protecting the consumers’ interests but could create a “massive” compliance burden on corporations, especially those operating from outside India.
“Currently, the rules neither provide any threshold for applicability nor any timelines or validity for DPIIT (Department for Promotion of Industry and Internal Trade) registration, becoming onerous for emerging companies,” he said.
Appointing employees in India may also add to the exposure of creating a permanent establishment in the country for foreign companies, he added. “Mis-selling of goods and flash sales have been strictly prohibited. Although these terms have been defined under the rules, they are subjective and open to interpretation.
“Therefore, each e-commerce entity will have to study the rules considering specific facts and circumstances to determine whether or not they are compliant with the law,” Jhunjhunwala said.
In March, the CAIT had asked the government to take “strict action” against e-commerce giants Amazon and Flipkart accusing them of violating India’s rules on foreign direct investment.
