Traders’ Body Urges DIPP Not to Allow Sale Of Private Labels On E-Commerce Sites

New Delhi: Traders' body CAIT Sunday urged 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.

In a letter to the Secretary in the Department of Industrial Policy and Promotion Ramesh Abhishek, the Confederation of All India Traders (CAIT) requested him to make it explicitly clear whether private labelling or branding is allowed under the foreign direct investment (FDI) policy in the e-commerce sector.

Such online business organizations will proceed with their ulterior thought processes through such escape clauses as they are doing since last numerous years and small retailers will be killer," CAIT claimed.

The administration, prior, had cleared up that private names were not prohibited from being sold on internet business commercial centers. One of the huge players, in any case, expressed that private marks are a little segment of the business and that the administration needs to address the bigger issues within reach.

Private brands, which are often sold at lower prices, allow e-commerce companies to control quality and even provide higher returns than well-known major brands. In recent years, e-commerce players have introduced private labels in several categories, including clothing, furniture and food.

Major e-commerce markets may move closer to the government, which plans to extend this period until February 1, as compliance with the latest changes will require at least 4 to 5 months at the operational level, as noted earlier, according to many sources.

However, in a letter to the Secretary, the DITP CAIT categorically opposes such an extension.

"The potential for expansion of these e-commerce businesses is to delay the equitable implementation of policies and to continue their programs of abuse of all kinds."

"That's why it's a big failure - to give malware to such e-commerce companies, and we should not allow this to happen," said the entrepreneurial organization.

The government's move to strike standards has hit Amazon and Flipkart - the most challenging of the new rules - in online sites where they have exclusive market agreements. Another provision says inventories will be sold if they represent more than 25% of the market share, including the largest bulk unit.

This step is to ensure that the market entity or its related companies have not been able to control subscriptions under the FDI rules.

Source: News 18