Ecommerce guidelines under scanner: DEA

The Department of Economic Affairs has raised certain questions over implementation of ecommerce guidelines, arguing it may not be possible to stop online firms from influencing product prices.

The issue was discussed in a recent meeting of a committee on ecommerce headed by the Niti Aayog CEO Amitabh Kant. It held its first meeting on September 5, to deliberate on issues related with the sector.

During the meeting, the Department of Economic Affairs representative suggested that ecommerce players store goods of vendors in their godowns and hence they may influence the prices of the products by giving discounts and commissions to the buyers, sources said.

In March, the government released guidelines for ecommerce players. It allowed 100% FDI through automatic route in the marketplace format of ecommerce retailing.

However, FDI was not permitted in inventory-based model of ecommerce. The guidelines also states that such entities will not “directly or indirectly influence” the sale price of goods and services and shall maintain level playing field.

The issue of offering discounts by marketplace online players has for long remain a bone of contention between e- commerce companies and brick and mortar stores.

The commerce and industry ministry had received lot of complaints by stakeholders including traders body Confederation of All India Traders (CAIT) on this matter. Following the protest, the ministry asked the online retailers to strictly comply with the guidelines.
The DEA has also stated that the present norms create artificial difference between marketplace and inventory-based models.

The department argued that though the idea is to create a level playing field for offline players, it may not be possible to ensure its implementation.