Traders' body says 50,000 mobile shops have shut because of illegal practices by e-commerce firms

Representative Image.

More than 50,000 mobile stores across the country have had to shut shop in the last few years due to illegal practices of foreign e-commerce firms, including violation of FDI norms and GST evasion, according to a traders body.

The Confederation of All India Traders (CAIT) alleged that e-commerce platforms, banks and mobile brands have created a nexus to deprive brick-and-mortar stores of business through anti-competitive practices such as cashbacks, deep discounting, predatory pricing and loss funding.

The traders’ body noted that while 8 percent of global mobile phone sales happen via e-commerce, this percentage is much higher in India at 58 percent due to such practices.

"We have requested the government time and again to look into the matter. Our ask is that the authorities should probe into the unfair and illegal practices of this unholy nexus," said Praveen Khandelwal, the secretary general of CAIT.

CAIT also alleged that some of the e-commerce platforms first acquire mobile handsets from big brands in exclusive deals, and then flood the offline market with these stocks. It further said that certain e-commerce players are even exporting these stocks obtained through exclusive deals and claiming GST input credit for the same.

"If this goes on, a time will come when all small retailers will have to shut shop in the country. These e-commerce firms are the modern version of the East India Company who ultimately want to capture the entire Indian market through unfair means," said Khandelwal.

"Of course, we recognise that anybody has the right to do business in this country. However, it can't be that the foreign e-commerce players flout all laws openly while small traders are pulled up by authorities for the smallest of things," he added.

The traders' body said that it is planning to meet Union Ministers Nirmala Sitharaman and Piyush Goyal to discuss the issues.

It also threatened to take to the streets if its demands for a comprehensive e-commerce policy, the implementation of FDI laws, and the establishment of an e-commerce regulatory authority, among other things, are not met.