In a letter to the US President Donald Trump, traders body Confederation of All India Traders (CAIT) said the Indian e-commerce market has been harmed by the “malpractices” and “unethical” policies of American e-commerce companies. American companies habitually violate India’s FDI policy through predatory pricing, deep discounting and other practices in both e-commerce and retail “bringing a bad image about USA and it’s business ethics”, CAIT said. News agency IANS first reported this.
The letter, addressed to the US President was sent through the US Ambassador to India, Kenneth Iyan Juster, a day before President Trump’s visit to India. E-commerce has also become a source for promoting counterfeit and pirated goods, which was acknowledged by the Department of Homeland Security in its recent 54 page report, CAIT noted.
CAIT is likely to approach the Supreme Court against Karnataka HC staying an antri-trust probe against Amazon, according to the IANS report. We have reached out to CAIT for more details.
E-commerce companies and traders bodies at odds
E-commerce companies and traders’ bodies have locked horns over deep discounting and how marketplaces are governed, as the offline-online retail battle plays out. Traders’ bodies such as CAIT and All Indian Online Vendors Association (AIOVA) want e-commerce companies to be thoroughly regulated, while e-commerce companies claim to be fully compliant with FDI rules.
- Amazon CEO Jeff Bezos’ India visit was marked by protests and opposition from groups of small business owners and members of CAIT. Commerce Minister Piyush Goyal had also said that Amazon’s promise to invest $1 billion in the country, was not a “great favour”.
- In December 2019, CAIT had written to the Prime Minister, asking for the government’s intervention given “unethical & unfair business practices” of online retailers like Amazon and Flipkart that flout FDI norms. However, Amazon said that sellers on the platform set their own prices.
- In September 2019, CAIT had written to Commerce Minister Piyush Goyal, to conduct an investigation into and place a blanket ban on festival sales by e-commerce companies for indulging in “predatory pricing” and “deep discounting”.
- At a panel discussion organised by the CCI in August on the impact of e-commerce on small and medium retailers, Amazon and CAIT clashed over Amazon’s allegedly unfair business practices. While Amazon claimed how it had helped remotely located craftsmen sell their products to a wider audience, CAIT held that the strategy of deep discounting and predatory pricing is harmful to small traders.
CAIT’s letter to Donald Trump: