The commerce ministry on Thursday told the All India Online Vendors Association (AIOVA) to approach the Department of Consumer Affairs regarding the resolution of payments settlement disputes with e-commerce companies, thus buttressing the need for an adjudicating authority as demanded by the sellers’ group. AIOVA, a group of nearly 2,000 sellers with internet marketplaces such as Flipkart, Amazon, Snapdeal, had made a demand last week to the commerce ministry for having an adjudicating authority to settle disputes in the sector.
“I am directed to refer to your email dated 6.03.2017 addressed to Minster of Commerce & Industry on the above subject and to state that the issues prima-facie appear to be related to disputes arising out of business operations of the entities involved and are not related to FDI policy as such. You are, therefore, advised approach Department of Consumer Affairs in this regard as they are the nodal Department as far as internal trade is concerned,” a commerce ministry official wrote in an e-mail reviewed by The Indian Express.
The e-mail sent by AIOVA to commerce minister Nirmala Sitharaman on March 6 was to highlight the problems being faced by sellers pertaining to settlement of dues by online marketplaces, and the need for stricter e-commerce regulations for safeguarding the interest of merchants affiliated with these platforms. The e-mail also highlighted that untimely payment of dues by e-commerce firms could have a domino effect on the micro-finance sector, which has exposure to the e-retail industry.
“Absence of an adjudicating authority is leading to such under the belt financial losses and causing collapse of the micro-lending companies who are severely exposed to the e-commerce sector,” the association had noted in the e-mail.
An AIOVA spokesperson said that a delegation of the body met an official at the Department of Consumer Affairs on Thursday, who assured resolution.
The e-retail sector has been in troubled waters for over a year now, with some major players even laying off their staff to restructure their operations. Experts have called for e-commerce firms to revisit their business models to focus on profitability after years of incurring losses to expand the market backed by investor funding.