Confederation Of All India Traders Ban On Private Labels

The small traders body Confederation of All India Traders (CAIT) asked the Commerce and Industry Ministry not to allow private labels to be sold on e-commerce marketplaces and desist from extending the February 1 deadline for implementation of the changes to FDI policy for the e-commerce sector.

CAIT in a communication asked secretary, DIPP, Ministry of Commerce Ramesh Abhishek not to succumb to any pressure for extending the February 1 deadline for implementation of the changes to FDI policy for the e-commerce sector.

CAIT secretary general Praveen Khandelwal said that Press Note No 2 of 2018 is merely a clarification of Press Note No 3 of 2016 and the policy is already in implementation. “It is neither any change nor amendment of policy and therefore even stipulating the said date for implementation of the policy is an error on the part of the DIPP. Since the policy is already implemented from 2016 no question of any extension is arises,” said Khandelwal.

He alleged that e-commerce companies are seeking extension to keep delaying execution of the FDI policy and they can continue with predatory pricing to control and dominate retail trade and wipe out the competition.

“Therefore, CAIT has strongly demanded the government not to fall prey under malicious agenda of such e-commerce companies and no extension should be allowed under any circumstances,” said  Khandelwal.

He said that there is an urgent need to make it explicit clear whether private labeling or branding is allowed under FDI policy in e-commerce or not.

“If it is allowed it will run contrary to the intention of the government to make e-commerce free from evils and malpractice and to provide an equal level playing field with fair competition. Such e-commerce companies will continue their ulterior motives through such loopholes as they are doing since last many years and small retailers will be killed,” he added.

The government, earlier, had clarified that private labels were not banned from being sold on e-commerce marketplaces.

Private labels often sold at lower prices allow e-commerce companies to control quality and even offers better margins than big, established brands. Over the last few years, e-commerce players have introduced private labels across a variety of categories including apparel, home furnishing and grocery.

Meanwhile research and advocacy firm CUTS International said on Sunday that rules for the e-commerce sector should treat both domestic and overseas players equally to boost the fast-growing industry. It said that the new guidelines for FDI in e-commerce sector are stricter for online retail firms having overseas investments providing marketplace service, but there are no such restrictions for local companies and it is creating an uneven playing field.

It said that online vendors’ concern of discriminatory treatment by present and upcoming domestic e-commerce platforms and deep discounts, can be dealt by the Competition Commission of India.― Deccan Chronicle

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