Priyanka Sahay Moneycontrol News
Mincing no words, the Confederation of All India Traders (CAIT) on January 16 said that the government will lose out on the votes of around 7 crore traders in the upcoming Lok Sabha elections if it extended the deadline for the implementation of new foreign direct investment rules in e-commerce.
"Major chunk of seven crore traders will not vote for them because any extension or any change in the policy will run against the genuine interest of small traders," Praveen Khandelwal, secretary general of CAIT, told Moneycontrol.
E-commerce companies such as Walmart-owned Flipkart and US-based Amazon have sought an extension of the FDI deadline stating that the regulation requires extensive overhauling of their business model.
While Amazon has asked for time till June, Flipkart has sought six more months, as per the report. Interestingly, these deadlines extend beyond the potential election dates.
The new norms make it difficult for the e-commerce companies fund discounts, do exclusive tie-ups and do business via group companies on their platforms.
Many companies were flouting these norms while running their businesses in India.
The government move is seen more opportunist and political in nature than anything else since it happens right ahead of the elections.
However given continuous lobbing by the e-commerce companies, the government is also open to discuss other possibilities with the stakeholders and would take a call on these issues closer to the deadline.
Moneycontrol reported it first on January 4.
The traders are definitely feeling the heat following these developments.
"We will be compelled to launch an agitation if the government doesn't listen to us," Khandelwal said.
CAIT has also demanded the government to institute a thorough probe into business activities of major e commerce players in past few years. It has been demanding penalties for e-commerce companies who were so far not doing business as per the required norms.
The online retail sales in India are expected to grow by 31 percent to touch $40 billion in 2019. India’s e-commerce revenue is expected to jump from $39 billion in 2017 to $120 billion in 2020, growing at an annual rate of 51 percent.
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