The Confederation of All India Traders (CAIT) has accused several leading e-commerce and quick commerce companies of committing what it calls “alarming and unchecked violations” of Indian trade regulations.
In a letter to Commerce and Industry Minister Piyush Goyal, CAIT Secretary General and Member of Parliament Praveen Khandelwal alleged that several digital platforms are bypassing the law by operating as inventory-based models under the guise of marketplaces, engaging in predatory pricing, and granting preferential treatment to selected sellers.https://smeventure.com/cait-flags-viola…mmerce-platforms/
CAIT warned that such practices are distorting competition and threatening the survival of lakhs of small traders and local kirana stores, which form the backbone of India’s retail economy. The organisation accused these platforms of “flouting existing legal and policy frameworks with complete impunity.”
Violation of FDI and Consumer Protection Rules
Despite clear guidelines under the FDI Policy and the Consumer Protection (E-Commerce) Rules, 2020, many platforms allegedly blur the lines between marketplace and seller, effectively controlling inventory and pricing. CAIT stated that this violates the fundamental principle of a marketplace model, which is meant to connect independent sellers with consumers without owning or influencing the goods sold.
Also read: Steel, Cement Lead 3% Core Sector Growth in September
The association further alleged that these firms are ignoring local licensing, delivery safety protocols, and fair trade norms, thereby disrupting the traditional retail ecosystem. Such practices, it claimed, are non-transparent and erode consumer trust, while placing small retailers at a severe disadvantage against deep-pocketed online players.
Call for Regulatory Oversight and Transparency
To restore accountability, CAIT has urged the government to introduce specific regulatory guidelines for both e-commerce and quick commerce sectors under the Consumer Protection Act and FDI Policy. It has also sought the establishment of a dedicated monitoring authority to oversee compliance.
In its recommendations, CAIT called for:
-
Strict penalties for violations of marketplace norms.
-
Mandatory disclosure of algorithms, data usage practices, and seller partnerships.
-
Transparent audit mechanisms for product listings, pricing, and promotional offers.
“The absence of a strong regulatory mechanism has emboldened these companies to act as if they are above the law,” Khandelwal said, adding that timely government intervention is essential to “restore a level playing field and protect lawful trade.”