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Govt to set up watchdog for retailers

Update On :21 September 2016

Govt to set up watchdog for retailers

The Confederation of All India Traders (CAIT) has urged the government to set up a proper watchdog which will regulate both offline and online retailers and oversee any violation of foreign direct investment (FDI) rules governing the country’s retail trade.

In a meeting with commerce and industry minister Nirmala Sitharaman last week, CAIT complained against alleged violation of FDI rules by e-tailers, CAIT secretary general Praveen Khandelwal told FE.

CAIT is also pitching for the creation of a new and comprehensive trade policy on, and a separate ministry for, internal trade at the both central and state levels.

The demands come amid growing clamour for the department of industrial policy and promotion (DIPP) to act against alleged violation of FDI rules by e-commerce players like Amazon, Flipkart and Paytm. The DIPP has maintained it only formulates FDI policies and isn’t their enforcing authority. CAIT, however, has been insisting it is “incumbent on the policy-making department (DIPP) to ensure its rules are properly implemented as well”.

To sort out the issue, Sitharaman had last month called meetings with various stakeholders, following which the government announced setting up a grievance redressal mechanism online, akin to the (hashtag) ‘#mociseva’ that the ministry already has, to look into the complaints against e-commerce players. 

The new FDI rules, announced in March, have barred any e-commerce player running a market place model from “directly or indirectly” influencing the sale price of goods or services. CAIT alleges that the e-tailers themselves have been giving discounts on products sold on their platforms, apart from announcing mega sales through newspaper advertisements. There are also allegations that these players are routing discounts through manufacturers or vendors on their platforms to bypass the FDI rule. For their part, the e-commerce players say they have always complied with the FDI norms.

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