Diluting Proposed Ecommerce Rules Is ‘Succumbing To Hidden Pressure’, Cait Tells Piyush Goyal

Amid reports claiming the Center may relax some provisions of the draft e-commerce rules, the Confederation of All Indian Traders (CAIT) wrote to Consumer Minister Piyush Goyal on January 2, demanding the rules rolled out. offered without any dilution. .

“Any dilution in the proposed rules on electronic commerce under the CPA (Consumer Protection Act) will infiltrate a strong feeling across the country that the government has succumbed to hidden pressures,” the organization of traders.

The proposed relaxation of the rules will also suggest that the government has offered the e-commerce landscape to global online retailers to “turn e-commerce to their advantage, even at the cost of disregarding the law,” he said. .

The heavily worded letter from CAIT comes three days after Moneycontrol reported, citing sources, that the Consumer Department may drop contentious clauses on large discounts and flash sales.

Notably, the 2020 Consumer Protection (Electronic Commerce) Rules first entered into force in July 2020. The Ministry of Consumer Affairs presented revised draft rules in June 2021, with the intention of strengthening oversight of consumers. e-commerce businesses.

The project proposed to hold e-commerce markets accountable for the quality of products sold on their platforms, put in place strong complaint mechanisms, and stop offering market-distorting discounts, among other things.

The ban on big discounts and flash sales on online platforms, which featured in the June draft, had been fiercely opposed by major e-commerce entities.

The provisions, however, are backed by the Merchants Association which has accused the global e-commerce giants of attempting to usurp the digital commerce space in India.

“It has been duly established that several foreign-funded e-commerce companies engage in predatory pricing, large discounts, loss financing, exclusivity, inventory ownership and a sales system in their business practices, facilitating the sale of banned products like marijuana according to a recent racketeering dismantled by the Madhya Pradesh police, “CAIT said in its letter to Goyal.

The association also tried to refute the argument that adopting strict e-commerce rules could have a negative impact on foreign direct investment (FDI) flows.

“Thanks to e-commerce, no substantial FDI enters India, but the money that comes in the guise of FDI is used to burn money or to bear huge losses incurred by global online retailers. “, did he declare.

Objections to the proposed rules, outside of major e-commerce players, were also raised by Niti Aayog, the Centre’s largest think tank. The agency had stressed that the standards could be stricter than necessary and could hamper the growth of e-commerce in India.

Niti Aayog had told the government that if online marketplaces cannot control the inventory sold on their platforms, they should not be held responsible for the quality of these products either.

CAIT, however, said these objections are “more of a technical nature”.

Deployment of e-commerce rules without any dilution, as well as e-commerce policy and FDI e-commerce rules “within a limited time frame” are essential to “ensure equal level e-commerce in India”, says the association.

First publication: STI

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