After HC order CAIT submitting govt representation on FDI in Retail
The CAIT has strongly opposed not only 51% FDI in Multi Brand Retail but also opposing 100% FDI in E commerce since FDI in E Commerce is allowed only for B2B model whereas the e portals are circumventing law and making B2C sales-alleged CAIT. The CAIT has submitted its representation to Ministry of Commerce, Finance and Consumer Affairs of Government of India.
On a writ petition filed by CAIT, Justice Mukta Gupta passed an order on 17th June, 2015 directing Union of India to hear plea of CAIT on FDI in Retail and also directed CAIT to file its representation to Union of India within seven days from the date of the order. Advocate Shilpi Jain argued in High Court on behalf of CAIT.
The CAIT in its representation has said that FDI in retail shall be creating an uneven level playing filed under which the brick & mortar shops are at a disadvantageous position in comparison to big retailers enjoying FDI. The big retailers are involved in predatory pricing with a focused aim to control & dominate the retail trade. It will also result into mass unemployment.
The FDI Policy in retail trade is in violation law of equality and law of prohibition of discrimination as ensured by the Constitution of India. The CAIT has drawn the attention of the Government towards Parliamentary Standing Committee on Commerce headed by Dr. Murli Manohar Joshi which had submitted its unanimous recommendation to Parliament in year 2010 and categorically said that, "Corporate retailers practice product bundling, whereby products of single or different brands are sold as combinations and bargains in the malls. This also adversely effects small shopkeepers and restricts over-all competition". The Committee has recommended that FDI in retail should not be allowed.
CAIT in its representation has demanded scrapping of 100% FDI in E commerce and said that e-commerce players are, in fact, stretching the B 2 B business to B 2 C and thereby in practice adopting 100% FDI to B 2 C also, which is in clear contravention of law. Further, Introduction of FDI in B2C e-retail will grant back door entry to foreign investors in multi-brand retail. The CAIT has demanded the Government to formulate a specified policy for e commerce business in India.
The CAIT has called for a categorical policy statement announced by the Government dis-allowing the big investment in Retail Trade in India even by way of joint ventures with the Indian partners and scrapping of 51% FDI in multi brand retail and suggested for formulation of a National Trade Policy for Retail Trade & a separate Ministry of Internal Trade to monitor domestic trade of India.
It has also demanded that on the pattern of MSME Act, a separate SMR ACT (Small and Medium Retailers Act) may be enacted with a cluster approach.Individual shop can become a link of chain shops under the cluster program.
Agreeing with recommendations of Parliamentary Standing Committee, the CAIT has also asked for formation of a National Commission to make an in-depth study of retail trade of India, its size, nature,problems and remedial measures thereof.
It has also demanded formation of a Retail Regulatory Authority to regulate retail trade of India under Chairmanship of a retired Judge of Supreme Court.
