FDI E-Commerce Policy Should Protect Interests of 8 Crore Small Merchants, Says PHD Chamber

New Delhi, April 5: The PHD Chamber of Commerce and Industry has issued a list of proposals to be included in the FDI e-Commerce Policy to protect the interests of 8 million small traders and the livelihoods of 30 million people who depend on them.

The Chamber has suggested that the foreign companies, which are only allowed to set up an e-commerce marketplace platform, should not have any direct or indirect control over the stocks.

Therefore, the definition of group companies should be broadened to include companies that operate the marketplace platform itself, their group companies, their affiliates, their affiliated companies, their related parties and any other person directly or indirectly controlled from above or to which the person(s) has/have in any way, directly or indirectly, any capital or beneficial interest in the above companies.

The Chamber recommends that the FDI e-commerce marketplace company should not be allowed to directly or indirectly control inventory as this amounts to prohibited multi-brand retailing by foreign companies. Therefore, the definition of marketplace-based e-commerce and inventory-based e-commerce model should be defined as an information technology platform of an e-commerce entity on a digital and electronic network to act as an intermediary between buyers and sellers.

The board said that an inventory-based e-commerce model should mean an e-commerce activity in which the inventory of goods or services sold on the e-commerce platform is owned or controlled, directly or indirectly of the e-commerce entity and will be sold directly to consumers. If goods or services sold by the group companies are resold on the e-commerce platform, this activity is also treated as an inventory-based e-commerce model.

It said the permission to enter into the B2B agreement should clarify that the e-commerce marketplace company and its group companies cannot sell the stocks they claim to be selling on its marketplace.

In addition, there should be a threshold limit for buying from domestic manufacturers and armed pricing to be followed in relation to domestic players.

There is a need to integrate the online marketplaces with the offline markets and ensure that they coexist peacefully and provide enough opportunities for domestic and international players in India’s booming e-commerce retail industry.

The chamber added that e-commerce platforms have a revenue stream from advertising, and vendors with larger pockets are able to leverage smaller vendors for front-page placement.

While the algorithm is proprietary to ecommerce platforms, it allows “preferred vendors” to achieve top front page spots.

If there were a way to regulate “advertising norms” in such a way that small local providers were given preferential treatment, this would level the playing field to some extent.

(The story above first appeared on LatestLY on April 05, 2021 2:13 PM IST. For more politics, world, sports, entertainment and lifestyle news and updates, visit our website Latestly.com).