The Confederation of All India Traders (CAIT) on Sunday urged Prime Minister Narendra Modi to ensure that there is no dilution in the draft of the e-commerce rules under any pressure of foreign-funded online firms. The CAIT said it has been observed that voices of terming the rules as stringent are being created.

A large number of foreign and domestic investors and other business entities, who have either invested in various e-commerce platforms or are doing business with them, are also said to be wary of certain proposed rules, including ‘fall-back liability’, flash sales, or deep discounting and data sharing.

Meanwhile, non-BJP ruled states mostly have expressed apprehensions about the new e-commerce rules proposed by the Ministry of Consumer Affairs to check mis-selling and fraudulent discounts as they fear there could be a negative impact on jobs and market access to small and medium enterprises.

“In the wake of expected pressure tactics of foreign funded e-commerce companies against the draft of  e-commerce rules...(we urged) him (prime minister) to ensure that no dilution is made in the draft of e-commerce rules under any pressure,” CAIT said. The draft rules after examining the suggestions and objections should be notified without any further delay, it added. It alleged that unethical and law violating business practices of foreign funded e-commerce companies has forced closure of a large number of shops in the country.

“Traders of India are not against e-commerce but are of the considered opinion that e-commerce is the most promising business avenue of the future, and traders should also adopt it as a stream of their business besides conducting business activities in their physical shops,” it said.

Officials of the ministry of consumer affairs stated that non BJP ruled states plan to suggest strong safeguard measures in the proposed rules to ensure that any changes in the Consumer Protection (E-Commerce) Rules, 2020 do not hamper their economic growth engines and revenue collections.

A senior official of a big non-BJP-ruled state said there is a view that the proposed rules can disturb the state’s business ecosystem, especially with regard to MSMEs and small entrepreneurs and will also limit the choices for consumers, rather than safeguarding their interest.

 He pointed out that MSMEs contribute almost two-thirds of the annual revenues generated on just two major platforms -- Amazon and Flipkart -- and that itself runs into thousands of crores of rupees, while there is a big chain involved comprising of businesses, self-employed individuals, warehouses, farmers etc and these platforms have created lakhs of jobs in the recent years.

Among the key amendments, the government has proposed a ban on mis-selling of goods and services offered on such platforms.