The Rashtriya Swayamsevak Sangh’s (RSS) economic wing — Swadeshi Jagran Manch (SJM) is set to train its guns on the thriving new market of Chinese e-commerce apps. The SJM’s internal research team is learnt to have assessed that Chinese ecommerce firms currently bag over two lakh orders per day from Indian shoppers and are delivering goods via couriers and postal gift shipments, bypassing and evading a range of Indian laws on payment gateways, custom duties and GST, thereby disrupting the micro, small and medium enterprises (MSME) trade market in India.
SJM is set to demand that all product shipments from China to India be channelized through the customs route and till then all postal gift shipments from China be stopped, download of non-GST compliant and unregistered Chinese e-commerce apps be banned and payment gateways be shut to them. The RSS affiliate has already red flagged the issue to the Ministry of Commerce and is now preparing to take it to the Prime Minister.
“We have talked to authorities in the commerce ministry on the issue and they are sympathetic to it. We feel that this issue, however, requires a concerted government effort to check the situation and so we will take it up with the PMO and the Reserve Bank of India (RBI) as well as the finance ministry,” Ashwani Mahajan, national co-convenor of SJM, told ET.
SJM argues that the China-based ecommerce sites or sellers like Shein, AliExpress and Club Factory among others are misusing a clause in India’s Foreign Trade (Development and Regulation) Act, which exempts gifts of up to Rs 5000 received from abroad by persons living in India from customs and other duties. The exemption was mainly aimed at low-value gifts sent by NRIs to families back home. Customs duties apart, no GST is being levied on these sales, and there are indications that identities of Indian NRI workers employed in the Middle-East are being misused in some of these gift shipments, SJM said.
It also pointed out that China Post appears to be heavily subsidizing packages and delivery cost of products shipped to India to promote its own small industry which is targeting India’s younger population via social media. Since the ecommerce sites selling these products are not registered as business entities in India, there are no easy processes for grievance redressed and returns, and hence the risk of ‘hazardous, prohibited, unsafe or substandard goods arriving in India’ also looms large, SJM said.
ET gathers that SJM would demand mandatory registration of e-commerce sites and apps, MRPs and invoices for all their products and higher diligence by India Post including thresholds of shipment booking system to ensure that the FT (D&R) Act is not misused. It would also suggest an integrated system that connects customs, RBI and India Post to track imports better. SJM has also relied on a Local Circles survey on the issue.
“While the scale of orders to these apps was about a lakh in August or so as per customer feedback, it has now risen to over two lakh per day. There are serious concerns over the impact on India’s MSME sector as it is an uneven playing field, with the Chinese apps evading rulebooks and duties. We also flagged off the issue to the government,” Sachin Taparia, CEO, LocalCircles, told.― Webz Site