Govt Mulls Strict Action Against Errant E Commerce Firms

The government has proposed strict action against the errant E Commerce companies who are allegedly indulged in unethical trade practices. Taking a note of the complaints of consumers, the government has asked the States to initiate an action against the E Commerce companies that are selling inferior products. The Department of Industrial Policy & Promotion (DIPP) will work with the Consumer Affairs Ministry and States on complaints filed by consumers against E Commerce firms.

Addressing media in the national capital, Commerce and Industry Minister Nirmala Sitharaman said that the department would coordinate with state governments and the ministry to resolve the issue.

“There are local level administrative issues where DIPP can’t participate and it is the States which have to address such as whether the companies are registered or fake with addresses and phone numbers that do not exist,” Hindu Business Line report quoted Commerce & Industry Minister Nirmala Sitharaman as saying.

In case of companies that are registered, the DIPP and Consumer Affairs Ministry will work together to see who these companies actually are, she added. The minister, however, did not share the names of the companies against whom complaints were received. The commerce ministry is also examining grievances of offline retailers and their associations against E Commerce companies.

Also Read: Grievance Redressal Body To Address Complaints Against E-tailers

The list handed over by Consumer Affairs Minister Ram Vilas Paswan to Sitharaman has the names of about 200 companies of which around 46 have not responded to mails sent to them by the Consumer Affairs Ministry with regard to redressal of customer grievances.

The commerce ministry received complaints from various IT associations alleging that major e-tailers were blatantly violating FDI norms. They allege that such firms were issuing advertisements in the media announcing sales on their online platforms in violation of FDI guidelines. The brick-and-mortar retailers have also complained that E Commerce companies offer discounts to consumers and circumvent foreign direct investment norms by infusing overseas capital into retailing directly to customers.

In March, the government allowed 100 percent FDI in online retail of goods and services under the so-called “marketplace model” through the automatic route, seeking to legitimize existing businesses of e-commerce firms operating in India. However, it prohibited them from directly or indirectly influencing the prices of products or services on their platforms.

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