Promoting district-level products through e-commerce detrimental to small businesses: CAIT

NEW DELHI: The Confederation of All India Traders (CAIT) came down heavily on the Directorate General of Foreign Trade (DGFT) for promoting e-commerce players to leverage district-specific products and their exports from the country.

Terming the idea of the foreign trade policy formulator idea as “good,” it noted that it would be detrimental to the interests of small businesses and the manufacturers located in districts. It is apprehended that such e-commerce players will monopolise the small businesses of the districts to their own interests, said CAIT in a media statement.

CAIT National President BC Bhartia and Secretary General Praveen Khandelwal, while strongly criticising the DGFT, said this move, taking into account the absence of any e-commerce policy and the rules, would prove to be counter-productive and would strengthen the “unholy arms” of e-commerce companies that are indulging in all kinds of malpractices.

Support of the DGFT, the National Trade Confederation argued, will provide legitimacy to their business model, which is under great question by CCI and other investigative agencies.

In a significant move to enable micro, small and medium enterprises (MSMEs) and boost e-commerce exports, the Directorate General of Foreign Trade (DGFT) is collaborating with various e-commerce players to leverage the district-level products.

In the first such collaboration with different e-commerce platforms, DGFT signed a memorandum of understanding (MoU) with Amazon India earlier this week.

As part of this MoU, Amazon, and DGFT will co-create capacity-building sessions, training, and workshops for MSMEs in districts identified by the DGFT.

The partnership aligns with the Foreign Trade Policy 2023, which identifies e-commerce as a focus area for amplifying India’s exports.

The DGFT is responsible for formulating and implementing the foreign trade policy with the main objective of promoting India’s exports.

Bhartia and Khandelwal of CAIT further said that they have no objection to leveraging e-commerce for exports, but their concerns were whether those entities working within the law of the land or not.

This move of the DGFT will give all opportunities and data to e-commerce players to enable them to exploit the same to serve their vested interests, CAIT argued.

Bhartia and Khandelwal claimed that the DGFT did not undertake any consultation with stakeholders or discuss the issue with its Board of Trade before making such a declaration. According to the CAIT media statement, Khandelwal is a member of the Board of Trade.

In its statement further, the confederation said that it urged Union Commerce Minister Piyush Goyal to “immediately” roll out an e-commerce policy and the rules.