RAI wants govt to ensure e-commerce norms are enforced

08 Apr '16

3 min read

The Retailers' Association of India (RAI) that includes the Future Group, Aditya Birla Retail and Shoppers' Stop has urged the government to strictly implement norms for e-commerce players. It also said it is prepared to take legal recourse if e-commerce companies continue to flout rules.

"We have sent a representation to the government asking for further clarifications so that there is no violation in implementation of the policy," B S Nagesh, RAI Chairman told reporters in Mumbai today.

"We are prepared to approach the courts once again in the next few weeks if the norms are not strictly implemented," he added.

Nagesh said the Association is awaiting the reports of an investigation by the Enforcement Directorate (ED) on whether e-commerce companies have skirted the country's foreign direct investment (FDI) rules by accepting overseas funds. The report is expected to be out in a few weeks.

Last November, the Delhi High Court had ordered the ED to probe the practices of e-commerce companies, when it was hearing a case by footwear owners that India bars overseas capital in the sector.

Kishore Biyani, the CEO of Future Group, insisted that the laws should be strictly implemented. He said that grocery and food retail should not be run with foreign money.

"All the hullabaloo about FDI in retail came in the grocery business. It should not be run with foreign money. Even after the rules have come inventory model is still being practised.... According to the definition, these companies are flouting the rules," he stated.

The retailers have appealed for further clarification regarding pricing of products and discounting. The RAI has also asked for all details of transactions between sellers and buyers on portals to ensure transparency, and that no seller should have over 25 per cent share on the marketplace.

The RAI has also questioned e-commerce players selling their own private labels, opening up physical stores to showcase products, and discrepancies in collection of state taxes.

On March 29, the government had okayed 100 per cent foreign direct investment (FDI) in marketplace e-commerce, where the company only provides platform for buyer and seller to connect with a rider that an e-commerce entity will not be permitted more than 25 per cent of the sales through its marketplace from one vendor or their group companies.

The government's decision had come under fire from the Confederation of All India Traders (CAIT) which is bitterly opposed to 100 per cent FDI in e-commerce. It had warned that traders across the country would strongly oppose this move.

CAIT described FDI in e-commerce as “a backdoor entry to global retailers which will facilitate them to side step restrictions in multi-brand retail since ecommerce has no geographical restrictions." (SH)