Foreign e-commerce cos creating false narrative against draft rules: CAIT

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The Confederation of All India Traders (CAIT) has alleged that foreign-funded e-commerce majors are creating a 'false narrative' that the draft norms for the sector would impact foreign direct investment into India and the country's image as an investment friendly nation. In a statement, the traders' body said that the draft e-commerce rules under the Consumer Protection Act have been designed in a way to set the basic fundamentals and parameters of e-commerce business in India which has registered an exponential growth since last year but suffers with various kinds of irregularities, anomalies and unhealthy business practices of some of the major foreign funded e-tailers.

It alleged that the "exploitation" of the e-commerce business has reached to an extent that lakhs of shops have been forced to close by unethical business practices of e-tailers in India. It is creditable that the union government has risen to the occasion and has come out with certain well specified and justified guidelines under the draft e-commerce rules, said Praveen Khandelwal, the Secretary General of CAIT. "It is highly regretted that one section is prompted to raise question marks on the draft e-commerce rules by these e-tailers," he added.

Also read: Foreign e-commerce companies violated Indian laws: Piyush Goyal

The organisation has urged Union Minister for Commerce Piyush Goyal to roll out an e-commerce policy immediately and also a regulator to regulate and monitor e-commerce business in India. According to Khandelwal some of the major foreign funded e-tailers are unhappy with the draft e-commerce rules because if these rules are implemented, they will have to bring drastic changes in their existing business format which will prove to be counterproductive to their "sinister" game of controlling and dominating the the e-commerce and retail trade of India.

"Therefore, they are trying to create a false narrative that rules are stringent, will increase compliance burden, will discourage FDI in India, and malign the image of India in the global market," he said. These are all useless arguments to derail the reform measures of the government to purify the e-commerce business of India. The Centre has extended the deadline for submission of comments and suggestions on the draft e-commerce rules till July 21. The Department of Consumer Affairs had, last month, released the proposed amendments to the Consumer Protection (E-Commerce) Rules, 2020, and had sought comments and suggestions July 6.

Among several stricter norms, the draft regulation proposes prohibiting flash sales. Further, as per the new draft regulations, no e-commerce entity shall allow any display or promotion of misleading advertisements, whether in the course of business on its platform or otherwise. Also, if the norms come into effect, every e-commerce shall establish an adequate grievance redressal mechanism having regard to the number of grievances ordinarily received by such entity from India.

Amazon and Flipkart, among others, will have to appoint a Chief Compliance Officer, a Resident Grievance Officer and a nodal contact person in India. CAIT, which has been at the forefront of the fight for a "level playing field" for offline traders, had urged the government not to extend the deadline for the submission of comments, amid reports that demands were made from certain quarters to extend the deadline.

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