Traders protest over proposed MSME partnership with Amazon, Flipkart

Hundreds of traders hit the streets of the capital on Thursday protesting against the Ministry of Micro, Small & Medium Enterprises' proposed move to make fee-based arrangements for small enterprises with online marketplaces such as Amazon and Flipkart.

The traders urged MSME Minister Nitin Gadkari to reject any such plan as they were not willing to accept any kind of collusion between etailers and the government.

"If the ministry is so serious, let it creates an independent e-commerce portal and the traders of the country will support such initiative and will do every bit of it to onboard 7 crore traders of the country on such e-commerce portal," said the Confederation of All India Traders (CAIT) spokesperson in a statement.

The traders alleged conspiracy on the part of Amazon and Flipkart to enter into crony capitalism under the garb of bringing foreign investment.

"These companies are subject to various investigations for their nefarious business model in various Countries and have also suffered from the imposition of huge penalties for violation of laws," added the statement.

The traders gathered at Jantar Mantar in the heart of the capital Delhi shouting slogans like Amazon Go Back, Flipkart Go Back!

"Now it is the time when the government should take a serious note of this issue and take immediate necessary action. Justice delayed is justice denied," said Praveen Khandelwal. the national secretary-general of CAIT.

If action is not taken against e-tailers despite their protests, the traders are planning to hit the road again with their families, including children. On December 27, traders across the country will go on a day-long hunger strike.

Last week, Entrackr had reported that the government is planning to help small enterprises through fee-based arrangements with online marketplaces such as Amazon and Flipkart who have larger buyers and sellers base on their platforms.

According to government official aware of the development, If a seller exits the platform after six months, a part of the fee may have to be refunded, but the money will not be paid back to the government in case of the seller sticks to selling via the marketplace for a defined period.

MSME had approached the government e-marketplace (GeM) which advised it to pay Amazon and Flipkart to on-board MSME units.

In the past year, the trader's body had reached out to the Finance Ministry, Commerce Ministry, Competition Commission of India (CCI) and the Prime Minister on violation of FDI draft norms by e-tailers.

In October, CCI chairman AK Gupta and Commerce Minister Piyush Goyal had also given a verbal assurance of action against firms flouting FDI norms.

Though, no concrete decision in this regard has been taken by the government.

In its complaints, CAIT had raised questions over Flipkart and Amazon's business models, discounting practices and their continuance of operation despite incurring losses in crores.

It also alleged Amazon and Flipkart of selling goods at much below the market value, paying only about one-fourth GST after selling goods at a 70% discount, and denying the government its legitimate GST revenue.

Both Amazon and Flipkart have denied any role in either pricing or discounting and claimed to be in compliance with the FDI norms. They attributed discounts offered on their platforms to the brands and sellers.