The government should set up a regulatory authority to monitor and regulate e-commerce businesses in the country, and it should be empowered with due rights to penalise these companies in case they violate India’s laws, the traders' body Confederation of All India Traders (CAIT) said. In a letter to Prime Minister Narendra Modi, the trade union also called for the government to issue a fresh Press Note, “blocking” e-commerce companies from violating India’s FDI rules. Press Notes are filed by the Commerce Ministry's Department for Promotion of Industry and Internal Trade to regulate Foreign Direct Investment rules. “The e-commerce landscape of the Country has been greatly vitiated by some of the major e-commerce companies who are continuously and openly violating the FDI policy, law and Rules without any fear of law by indulging into predatory pricing, deep discounting, loss funding, controlling inventory, sale of branded products exclusively on their respective portals,” CAIT said in the letter. India’s FDI policy for e-commerce, the latest version of which is Press Note 2 (2018), allows 100% FDI in B2B e-commerce, i.e. the marketplace model. However, e-commerce companies operating marketplaces have to meet certain conditions. Among other things, they cannot exercise ownership over any inventory sold on their marketplace, or influence the sale of goods directly or indirectly. CAIT’s letter comes after a damning Reuters report, which showed that a handful of sellers, such as Cloudtail and Appario, accounted for more than 60% of Amazon’s sales in India. The report revealed how Amazon used…
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