Published
Dec 31, 2018
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CAIT criticises USISPF's FDI stance

Published
Dec 31, 2018

The Confederation of All India Traders (CAIT) criticised the US India Strategic Partnership Forum (USISPF) for its condemnation of the new foreign direct investment (FDI) policy and accused large businesses of trying to influence the government.

CAIT has stated that it will protest any big business' attempt to influence the Indian government on FDI - CAIT- MAHA- Facebook


The updated FDI regulations, unveiled by the Department of Industrial Policy and Promotion (DIPP) on December 26, prohibit any e-commerce marketplace from selling products through businesses in which they have an equity participation.

This impacts the business models of India’s online giants Amazon and Flipkart, now also both US-owned. Although the government stated last week that these are not new rules, merely a clarification of existing rules, there has been confusion over what this means for the businesses.

Following the policy, the USISPF made a statement on December 28 calling the policy “regressive” and “anti-consumer” as well as lacking transparency and unpredictable.

However, on December 29, CAIT responded to the USISPF and the CAIT national president B C Bhartia and general secretary Praveen Khandelwal both opined that the USISPF’s statement showed meddling by an outside agency in government policy.

Moreover, the two opined that the USISPF is most likely being influenced by large foreign owned businesses such as Amazon and Walmart (owner of Flipkart) to take a stand against the policy.

CAIT has praised the FDI policy as have many smaller businesses, hoping for a more level playing field in the online marketplace. However, there are some concerns over the condition that vendors cannot sell more than 25 percent of their merchandise on one online marketplace which may also affect small online businesses.

“Multinational companies and big countries create international forums and under the garb of consolidation and advocacy they try to create pressure on representatives of developing countries to adopt the policies in favour of multinational companies, a live example of forthcoming meeting of World Economic Forum at Davos,” said CAIT in a statement as reported by ET Bureau.

The organisation also stated that any attempt by large businesses to influence the government will be strongly opposed.

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