An RSS reminder: Ban e-tail like Amazon, Flipkart

"We are of the opinion that FDI in e-commerce should be prohibited by law."

Written by Liz Mathew | New Delhi | Updated: January 18, 2015 8:34 am

Claiming that foreign e-commerce firms such as Amazon and eBay are “killing domestic players in the Indian market”, the economic wing of the RSS has asked the government to ban not only these, but also Indian players such as Flipkart which have high foreign fund infusion.

Unhappy with the BJP-led government’s overall foreign direct investment policy, leaders of the Swadeshi Jagran Manch (SJM) met Finance Minister Arun Jaitley earlier this month for a discussion on the budget and have sought a white paper on FDI.

“We are of the opinion that FDI in e-commerce should be prohibited by law. Though we do not allow FDI in e-commerce sites, they circumvent the law to sell their product in the country. Even Indian e-commerce firms like Flipkart have turned to be foreign now with funding from outside. There is a lacuna in the law and this cannot be allowed. We have asked the Finance Minister to plug loopholes in the law,” Ashwani Mahajan, SJM national convener, told The Indian Express.

Although Indian law does not allow FDI in e-commerce sites that sell products to customers directly, it allows FDI in market places that link sellers and buyers. In a November 2014 report on e-commerce, Motilal Oswal Securities said that the $11-billion e-commerce market in India is expected to grow 37 per cent to reach $20 billion by the end of this year.

The government, however, does not have any data on the e-commerce industry. Replying to an unstarred question to Rajya Sabha MPs D Raja and M P Achuthan, Minister of State for Consumer Affairs R D Danve said: “At present no official data on e-commerce industry is being compiled/available and there is no proposal under consideration for a separate regulatory framework for e-commerce.”

“This is more harmful than FDI in retail,” Mahajan said, adding that the firms started their business under the previous UPA government.

According to SJM, e-commerce firms get into predatory pricing which is “unethical”, and will “kill” Indian retailers. “Their explanation for giving high discount is that they are doing it in lieu of the data provided by customers. But ultimately, these foreign companies with deep pockets will destroy Indian retailers,” Mahajan said.

Citing an example, he said while a publisher gives 35 per cent discount on a book to book shop owners, the CEO of the same publishing firm orders the same book on Flipkart at 50 per cent price. “So we have asked the Finance Minister to ban them by law and plug the loopholes. He has to respond to our demands in his budget,” he said.

SJM leaders, who disapproved raising the FDI limit in defence and insurance sectors, asked Jaitley to come out with a white paper on FDI before increasing the FDI cap in other sectors too.

“The government is talking about Make in India, but you are asking for more FDI in different sectors. We want to know what has happened so far. We have asked the government to undertake a study and bring out a white paper,” Mahajan said.

The organisation, which had raised objections to the government’s economic policies even during the Vajpayee-led NDA government, pointed out that the policy on FDI has “not done any good” to the country.

“In 2013-14, FDI inflow was $21.5 billion but the outflow was $34.4 billion. With changes in royalty and dividend rules and salary, the outflow has been on the rise. If the trend continues, and the government opens more sectors, there will be a time when there are no more sectors to open up and the outflow will top $100 billion. This will be very dangerous for our industry,” Mahajan said.

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  1. B
    Bangalorean
    Jan 18, 2015 at 4:53 am
    Who on earth wants to walk all the way to kirana stores that sell old stock and price high instead of Flipkart and Amazon that deliver quality to door step with discounts. Does RSS wants to live in stone age? [PS: I am an Brahmin]
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      Anon
      Jan 18, 2015 at 5:15 am
      who the are these guys (Swadeshi Jagran Manch (SJM)) anyways?Just ignore them and move on.
      Reply
      1. R
        rajnikant b
        Jan 17, 2015 at 8:39 am
        RSS should learn to change with times.Governance,business, education is now on e platform ,a trend seen all over. By banning Flipkart etc, RSS plan to kill the spirit of enterprise. We have to learn to fight compeion, if we want to succeed and be at par with Global giants.
        Reply
        1. S
          sunny
          Jan 17, 2015 at 6:16 pm
          i totally agree with RSS flipkraft and amozon should be banned in india
          Reply
          1. A
            Akshay Bapat
            Jan 22, 2015 at 6:25 am
            Yeah, I have got to get an MBA and learn the fancy terms.. ;) Kidding.. That's what I meant..
            Reply
            1. A
              Akshay Bapat
              Jan 22, 2015 at 6:43 am
              Just because I avail home loan does not warrant that I should also go for a two and a four wheeler loan, does it? Foreign investment is a loan. A long term one with great interest rate at that! We must only avail it for sectors where we feel enough money isn't being spent already.. Also, we ourselves are a capitalist country flooding other markets, but isn't that more the reason to protect self interests?
              Reply
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                Akshay Bapat
                Jan 18, 2015 at 5:59 am
                It is not about going back to past sir.. It's a textbook capitalist strategy used by foreign investors to wipe out in-house businesses. Foreign investors are cash rich and can sustain losses for longer periods than the in-house businesses. So, they provide discounts capturing market while sustaining serious losses, however at the same time driving in-house e-commerce players out of business. The concern raised is that once the compeion is out, not only won't the customers get that kind of discounts anymore, the royalty terms will be revised and much of profits will routed out of India. That needs to be prevented and that's where FDI policy plays a major role. The policies need to be revised so that such maneuvers can be blocked and that's what is being requested actually. If the current players don't respect your sovereign, it's only just to ban them from operating there. We'll have the Internet age, only with a firm foundation.
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                  Anup
                  Jan 18, 2015 at 5:36 am
                  NaMo does not need any opposition parties; there are enough people in his own party that are determined to derail his development agenda!
                  Reply
                  1. S
                    Subhash Bennur
                    Jan 17, 2015 at 3:22 am
                    Shut up both RSS/SJM....This is a liberalized world. If you stupid guys pursue these matters no body will place orders on Indian IT Industry. Do you guys what you are talking. Stop this uncouth statements.
                    Reply
                    1. R
                      Rahul Sharma
                      Jan 18, 2015 at 5:39 am
                      fdi allow nahi karoge,internet bhi nahi karege lok....they are fearing their real face would get exposed if people become advanced....
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                      1. T
                        tommy
                        Jan 18, 2015 at 7:07 am
                        i guess what you are talking about is the "long purse model" of predatory pricing
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                        1. D
                          Devaki Khanna
                          Jan 17, 2015 at 12:11 pm
                          Sir, if the RSS had its way, we'd be heading back to 1000 AD or BC 1500, whenever India was truly Hindu. Note its programmes--ghar wapsi, censorship of books (the Perumal Murugan affair--they're somewhere in the background), disapproval of opening up the economy (because intelligent young people will want to work for corporate organizations, not as pracharaks), etc.
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                            B Ravinder
                            Jan 18, 2015 at 5:57 am
                            If things were left to the RSS, India will recede back to the dark days, which we saw before the 1990s! These zealots should be ignored, if our country has to develop Dr B Ravinder Reddy Hyderabad
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                            1. A
                              ah
                              Jan 17, 2015 at 1:39 am
                              yeah right ............................. farmers, tribals, retailers etc. will be taken care AFTER say 500 years ........... LOL ....... Nephew calls FDI and Uncle wants FDI out ........ meanwhile ALL ARE HAPPY with Foreign Exchange pouring in for DONATIONS ......................... LOL
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                                Amit Khanna
                                Jan 17, 2015 at 8:52 am
                                If You think Flipkart Snapdeal and Amazon are working in National Interest by Changing the Way Business is Done - You are Gravely Mistaken. They are DIGGING GRAVES of The small time Traders by Using those billions of dollars to sell goods at PREDATORY PRICES. They are Making more than ONE CRORE Small Businesses IRRELEVANT in the market place.
                                Reply
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                                  Amit Khanna
                                  Jan 17, 2015 at 8:39 am
                                  RSS has got the pulse right - has proven they are patriotic by the core - FDI in Retail / e-commerce is used for Predatory Prices by these players and ruining our economy.
                                  Reply
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                                    Amit Khanna
                                    Jan 17, 2015 at 8:15 am
                                    RSS has got the pulse right .. This issue is capable of damaging our economy beyond repair .. in time action must be taken .. please sign our peion for the same cause ..s:www.change/p/prime...
                                    Reply
                                    1. A
                                      Amit Khanna
                                      Jan 17, 2015 at 8:40 am
                                      This is one peion on the same issue .. s:www.change/p/prime...
                                      Reply
                                      1. A
                                        Amit Khanna
                                        Jan 17, 2015 at 9:17 am
                                        very good
                                        Reply
                                        1. K
                                          Kirpal
                                          Jan 17, 2015 at 1:43 am
                                          RSS and BJP are concerned for retailers and not for ordinary consumers. They want retailers to continue exploiting Indian consumers by selling goods at exorbitant costs and want e tailers to go away for charging less from consumers.
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                                            indieboy
                                            Jan 17, 2015 at 5:02 pm
                                            Swadeshi jagaran manch, These are complex days of globalization. Pls redefine waht is swadeshi.Anything that create desirable eco system within india is swadeshi. Imagine an Indian businessman investing in properties abroad or goes on international holidays. Imagine foreign org investing in R&D in India, builds talent in india. Flipkart is enabling small-time indian manufacturers to list products on internet and sell across the world. Imagine someone deep in rural area, being able to list the processed food online in amazon and sell to the west. with that money, she will celebrate Nav rathris, Uttarayan better.So, do lot of brainstorming and update the ideas on what is good for india. no easy answer.
                                            Reply
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