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Offline mobile sellers against e-commerce deadline extension; Flipkart warns ‘significant consumer disruption’

The All India Mobile Retailers Association (AIMRA), which claims to represent 2 lakh mobile retail stores in the country, has now written to Lok Sabha and Rajya Sabha members urging the government against any deadline extension of the new FDI in e-commerce policy, reports the Economic Times.

The association’s letter, a copy of which can be found on ET, wrote that Amazon and Walmart-Flipkart are carrying out “unethical and illegal practices.”

  • Further, the letter says that the companies are harming the retail sector with “illegal use” of FDI by influencing prices, with the eventual attempt to control the country’s retail trade and earn monopoly profits.
  • The companies are already monopolizing supplies and offering discounts through their web of companies.
  • Press Note 2 is “one small attempt” to checking their malpractices, and it urged the government to not give in to the Amazon and Flipkart’s demands to extend the deadline, says the letter.
  • The association notes that the companies will harm sellers and buyers both, and urged for a discussion in the Budget Session of the Parliament.

AIMRA claims that 56% of all mobiles sales in India take place online, adding that exclusive partnerships between mobile brands and Amazon & Flipkart have reduced sales of offline retailers.

Domestic e-commerce firms and traders’ bodies against extension too

AIMRA’s letter comes just after Snapdeal, Shopclues and other domestic e-commerce players wrote to the DIPP and the Union Commerce Minister Suresh Prabhu against a deadline extension, supporting the February 1 date for the new policy to come into effect. Besides them, traders’ bodies CAIT and Swadeshi Jagran Manch have voiced their opposition against any deferral of the deadline.

Earlier this month, Amazon and Flipkart asked that the deadline be extended by 4 and 6 months respectively.

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Read about the multiple issues relating to the ecommerce policy here.

Flipkart warns of “significant customer disruption” with deadline

Flipkart has told the Indian government that the company’s customers will face significant disruption if the deadline is not extended by 6 months, reports Reuters. According to the report, Flipkart CEO Kalyan Krishnamurthy wrote to the government earlier this month, explaining that the company would have to “redesign numerous elements of [Flipkart’s] technology system” to be compliant with the new law. He further wrote that:

  • The new policy’s conditions could have “undesirable impact” on the growth of e-commerce in India, and that Flipkart wanted to work with government to promote pro-growth policies to develop e-commerce
  • The short deadline has caused the company to divert significant resources, claiming that Flipkart had:
    • 80,000 employees & contractors and
    • 5-6 lakh shipments and packages were moved daily

Reuters’ anonymous source said that Flipkart is focusing on working with sellers to ensure compliance, and that “all the rest is on the back-burner” right now.

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