Traders body CAIT has shown strong opposition against the Government’s 100 per cent FDI policy, which – according to CAIT – has put small retailers in a bind. CAIT has asked the concerned bodies to fix loopholes, and allow a level-playing field to local entrepreneurs.
Around 10,000 traders across the country have gathered in New Delhi for a two-day conclave to oppose the policy.
CAIT Secretary General Praveen Khandelwal said that the circular issued by the Government does not mention the detail of ‘a group company’.
Trade in 24 segments has been affected up to 40 per cent due to the heavy discounts offered by the on-line firms.
“At times the Companies Act definition of Group Co is used. I believe with such definition entities like Cloudtail – a JV between Narayana Murthy’s investment company and Amazon – are not group companies of Amazon,” Praveen Khandelwal was quoted by PTI as saying.
Cloudtail accounts for more than 40 per cent of Amazon India’s sales.
“Cloudtail actually is a listed retailer on Amazon. Amazon invests in Amazon while keeping an inventory. With what convoluted logic can Amazon carry on using Cloudtail? For all practical purposes, Amazon is controlling Cloudtail’s operations and Murthy is only a name lender and still there is no restriction on Cloudtail. Similarly, Flipkart has its own nominee – WS Retail,” Khandelwal was further quoted as saying.
“E-commerce firms are funded through private equity or by venture capitalists. This money is interest free. Even regular funds only 0.7 to 3 per cent interest rate while traders are paying 12 per cent interest,” Khandelwal was quoted by PTI as saying.
“The Government has implemented the policy without any impact assessment. The Government has not even talked to the stakeholders of the sector. We are demanding a rollback of the Government’s new policy of e-commerce allowing 100 per cent FDI (in marketplace format),” Khandelwal said in conclusion.