Internet retailers ‘colonizing’ India: trade body

Amazon, Flipkart and Walmart are among digital retailers targeted by the Confederation of All India Traders (CAIT), which warned the country is being “colonized” by e-commerce. (Reuters/File)
Updated 07 December 2019

Internet retailers ‘colonizing’ India: trade body

  • The trade body’s calls for government intervention follow a major protest by traders demanding strict regulation of online giants

NEW DELHI: India’s leading trade body has accused global e-commerce giants of relying on “unfair trade practices and predatory pricing” amid demands for tougher regulation of online retailers.

Amazon, Flipkart and Walmart are among digital retailers targeted by the Confederation of All India Traders (CAIT), which warned the country is being “colonized” by e-commerce. 

In a petition to Indian Prime Minister Narendra Modi, the trade body said digital retailers “are bravely violating the FDI (foreign direct investment) policy of the government by indulging in all kinds of unethical and unfair business practices.”

It accused online retail giants of “offering deep discounts, indulging in predatory pricing, controlling inventory, having exclusivity of products and maintaining preferential seller system.” 

Vipin Ahuja, president of CAIT’s New Delhi chapter, told Arab News: “We are in favor of online business, but some of the big foreign online companies are hell-bent on destroying shop owners across India. They are selling products with heavy discounts, and offline traders are suffering huge losses.”  

He likened the situation to India’s colonization.

“The British East India Company colonized India in the 17th century after entering the country as a trader. Now these foreign traders are doing the same. The e-commerce giants have huge debts, yet they pump money into India and harm local traders with their deep pockets,” Ahuja said.

The trade body’s calls for government intervention follow a major protest by traders demanding strict regulation of online giants.

On Nov. 20, after Diwali, a major festival in the Indian calendar, more than 700 traders gathered in the heart of the capital “calling for regulation against Amazon, Walmart and other companies.”

The retailers said they had lost market share to big online traders during the peak festival season in October and November.

Another protest has been called for Dec. 12, with businessmen from around the country expected to participate.

India has 70 million retail traders who control more than 80 percent of the market. Traders traditionally support Modi’s ruling Bhartiya Janata Party.

Commerce Minister Piyush Goyal issued a warning in October that “e-commerce companies have no right to offer discounts or adopt predatory pricing.”

New Delhi tightened regulations for online retailers last year, forcing companies such as Amazon and Walmart to restructure their businesses and withdraw some sale items.

Amazon and Walmart said last week that their “operations comply with Indian law, and that they act only as a third-party marketplace.”

An Amazon spokesperson said the company is “a third-party marketplace where sellers offer their products to customers for sale and have the complete discretion to decide what products to sell and at what prices.”

Amazon India has 550,000 sellers, including micro, small and medium enterprises, and the company has “enabled exports of over $1 billion, helping to create more than 20,000 millionaires in 2019, and almost 200,000 jobs,” the spokesperson said.

Ashish Gupta a mobile phone trader in Noida, a New Delhi suburb, blamed online traders after he was forced to close his shop following two years of losses.

“The kind of discounts that e-commerce companies have been offering is mind-boggling. As a retailer, I cannot think of offering 60 percent off a mobile phone,” he said.

“I invested close to $45,000 in my shop, but that money has gone down the drain,” he told Arab News.

With the Indian economy struggling, losses suffered by retailers have led to rising unemployment.

“Shop owners employ large numbers of people and if their business is under threat then these jobs are also under threat,” Prof. Arun Kumar, an economist at Jawaharlal Nehru University in New Delhi, said.

He said regulation is needed “to save shopkeepers from predatory pricing.”

“Only better-off consumers are benefiting. Poorer people are not into online shopping as they don’t have the Internet and other facilities,” he said.

“This is malpractice. You have deep pockets and you can drive out competition. The benefit that the consumers are getting is short-lived. Once local shops are driven out, then the e-commerce giants will raise their prices.”


Malaysia’s Anwar says has ‘strong’ support to form govt

Updated 23 September 2020

Malaysia’s Anwar says has ‘strong’ support to form govt

  • The Southeast Asian nation has been in turmoil since an alliance that swept to power in 2018
  • Muhyiddin Yassin became premier at the head of a coalition backed by a scandal-plagued party which had been ousted at the polls two years earlier
KUALA LUMPUR: Malaysian opposition leader Anwar Ibrahim said Wednesday he had the “strong” backing of lawmakers in parliament and was seeking an audience with the king to form a new government.
The Southeast Asian nation has been in turmoil since an alliance that swept to power in 2018, which was headed by Mahathir Mohamad and included Anwar, collapsed in February amid bitter infighting.
Muhyiddin Yassin became premier at the head of a coalition backed by a scandal-plagued party which had been ousted at the polls two years earlier, but he had only a wafer-thin majority in parliament.
Speaking at a press conference in Kuala Lumpur, veteran politician Anwar — who has long sought to become prime minister — said he now had the backing of enough MPs to form the government and oust Muhyiddin.
“Conclusively we have a strong, formidable majority,” he said, but did not reveal the number of lawmakers backing him.
“The government under the leadership of Muhyiddin Yassin has fallen.”
A government must command the support of a majority of the 222 MPS in parliament.
The was no immediate reaction from Muhyiddin. He was due to give a televised address to the nation later Wednesday.
Anwar said he had been granted an audience with the king on Tuesday but the meeting was postponed as the monarch is receiving treatment at a heart center in Kuala Lumpur.
The 73-year-old said he would meet with the king, who formally appoints the country’s prime minister, once he recovers, and would reveal more details to the public afterwards.

Anwar said a number of MPs had “expressed their deep dissatisfaction with the current leadership.”
“They recognize that the country must have strong, stable and accountable leadership to manage the crisis and to do so with compassion and concern for the plight of all people who are struggling in this pandemic economy.”
His move came ahead of weekend elections for the legislature in the eastern state of Sabah, which will be a major test of the current government’s popularity.
Muhyiddin’s government has had the difficult task of leading Malaysia through the coronavirus pandemic, and the economy suffered its worst contraction in more than 20 years in the second quarter amid a strict lockdown.
Long-time opposition leader Anwar was a key figure in the alliance that won a shock victory at landmark elections in 2018, toppling a scandal-plagued coalition that had ruled Malaysia uninterrupted for over six decades.
Voters kicked out the old regime in large part due to anger at former premier Najib Razak’s involvement in a massive financial scandal which saw billions looted from state coffers.
Mahathir, now 95, became prime minister for a second time and Anwar was released from jail, where he had been serving a sentence after being convicted of dubious sodomy charges.
Mahathir had promised one-time nemesis Anwar he would hand over power to him once he stepped down, but tensions grew between rival factions amid suspicions that Mahathir would renege on the deal.
Mahathir then quit as premier, leading to the government’s collapse.
Muhyiddin outmaneuvered Mahathir and succeeded in forming a coalition dominated by the country’s Muslim majority that included Najib’s party, and was appointed premier by the king without an election.
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