CAIT requests minimum operating prices to counter predatory pricing
today Nov 18, 2019
The Confederation of All India Traders has requested the Union Government’s Commerce and Industry Minister Piyush Goyal to create a “minimum operating price” for products to fight against predatory pricing.
CAIT sent a letter to Goyal on November 17 to request MOPs for products and that the government hold a meeting with stakeholders on the issue. The traders’ organisation accused e-commerce businesses of colluding with banks to charge exceedingly low prices for goods which is depriving the government of goods and service tax revenue.
"Under the circumstances and visualising it as a price war, we suggest it is the high time when the government must step in and enforce the fundamental of Minimum Operating Price (MOP) which is the price consisting of landing price, operational cost and reasonable profit margin and below the MOP no product should be sold in the market," read CAIT’s letter, the Press Trust of India reported.
The organisation argued for a policy that covers both online and offline trade. CAIT also asked for an end to “cash on delivery” for online purchases, arguing that all goods bought online should be paid for through digital payments.
In order to ensure that businesses enforce MOPs, CAIT suggested the creation of a regulatory authority which would also examine all retail trade. CAIT is currently organising protests across India against foreign-owned e-commerce businesses Flipkart and Amazon and has accused them of predatory pricing which it believes is negatively impacting Indian traders.
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