Cancel licence of Chinese brands OnePlus, iQoo, Poco: Mobile retailers urge Centre

Suspend licence of Chinese brands OnePlus, iQoo, Poco: Mobile retailers urge Centre

Mobile retailers are urging the Central government to prohibit Chinese-owned brands like iQoo (owned by Vivo), Poco (owned by Xiaomi), and OnePlus (owned by Oppo) from doing business in India. They claim that these brands engage in anti-competitive practices that result in financial losses for the government.

All India Mobile Retailers Association (AMIRA), an apex body representing the country's over 1.5 million mobile retailers, has sought the intervention of Commerce and Industry Minister Piyush Goyal and Finance Minister Nirmala Sitharaman, calling for the cancellation of licenses for such companies.

"Despite CCI reports and persistent follow-ups, these companies continue to violate regulations by maintaining exclusive agreements with e-commerce platform Amazon and refusing to distribute products through retail stores. Additionally, the unauthorised diversion of products from e-commerce to retail channels disrupts fund rotation and denies the exchequer the opportunity to benefit from added rotational GST," Kailash Lakhyani, Founder and Chairman of AIMRA, told Moneycontrol.

They said protecting local businesses and upholding fair trading practices in the country is crucial.

"The troubling trend of exclusive distribution to major e-commerce platforms has marginalized local retailers and raised concerns about compliance with regulations. Many Chinese companies follow a similar modus operandi by using online platforms to support grey market activities, undermining fair trade practices in Bharat," he added.

The association highlighted these issues in a letter dated September 27 to Praveen Khandelwal, a Member of Parliament. It sought his help in raising the issue with the Commerce and Finance ministries. "A recent CCI report revealed anti-competitive practices between e-commerce platforms and OEMs. We seek to cancel licenses for companies that do not support local businesses and fair trading practices in Bharat," Lakhyani said.

"We request your intervention to escalate this issue to the Hon'ble Commerce and Industry Minister, Piyush Goyal, and  Finance Minister, Nirmala Sitharaman, calling for the cancellation of licenses for such companies. It is crucial to protect local businesses and uphold fair trading practices in our country," he added in the letter.

Highlighting the practices of Vivo's sub-brand iQoo, AIMRA stated that the brand's products are mainly sold through online platforms such as Amazon, Flipkart, and its online store. The retailers' body said it has consistently urged both Vivo and iQoo to ensure that stocks are supplied to traditional retail outlets. "IQOO smartphones, a sub-brand of Vivo Mobiles, which is currently under investigation by the Enforcement Directorate for a money laundering case. Additionally, Vivo’s name has surfaced as an offender in the latest findings by the Competition Commission of India (CCI). Despite our persistent efforts, we have encountered continuous delays and no progress in billing retailers."

Lakhyani said these brands' earnings are retained in CKD, with minimal contribution to the exchequer. "Local traders lack product access, eliminating any contribution to the economy. Customers are deprived of bargaining rights, limiting competition and sales through online channels only."

The Competition Commission of India (CCI) recently accused Chinese smartphone makers and Samsung of collaborating with Amazon and Flipkart to roll out their products exclusively on these e-commerce platforms’ Indian sites in breach of antitrust laws. As per an antitrust report, a recent probe carried out by the CCI found that Amazon and Flipkart violated local competition laws by giving preference to select sellers, prioritising certain listings and steeply discounting products, hurting other companies.

The 1,027-page report from the CCI on Amazon stated that the Indian branches of five companies - Samsung, Xiaomi, Motorola, Realme, and OnePlus - were participating in the practice of exclusive phone launches in collusion with Amazon and its affiliates, thereby violating competition law.y violating competition law. In Flipkart’s case, a 1,696-page CCI report said that the Indian units of Samsung, Xiaomi, Motorola, Vivo, Lenovo, and Realme had conducted similar practices.

AIMRA, in association with the Confederation of All India Traders (CAIT), issued a whitepaper stating that a robust e-commerce policy framework is needed to close regulatory loopholes, ensure fair competition, and protect consumers.

The paper released on October 1 also suggested eliminating GST input credits for B2C transactions to curb tax evasion and banning exclusive instant cashback to prevent anti-competitive practices. Additionally, the suspension of e-commerce festival sales is advised to tackle market manipulation, and the introduction of a luxury tax on high-end products sold online is proposed to create a level playing field for both online and offline retailers.

Traders' bodies CAIT and AIMRA said the Competition Commission of India (CCI) should immediately suspend the operations of e-commerce companies Flipkart and Amazon as they are engaging in predatory pricing and burning cash to offer heavy discounts on products. These practices, in turn, are creating a grey market of mobile phones, causing losses to the exchequer "as players in the grey market evade taxes," they said.

BJP MP and CAIT Secretary General Praveen Khandelwal criticized Flipkart and Amazon for predatory pricing and deep discounting. Speaking at a summit organised by AIMRA, Khandelwal said, "It looks that there is a cartel between e-commerce players, the brands, and the banks. They are hand-in-gloves to capture the market by various means but mainline retailers will not allow this to happen. We are not against e-commerce but we want a level-playing field and fair means of doing business."