Confederation of All India Traders (CAIT), representing over 8 crore retail traders, has raised concerns about FDI-backed e-commerce firms attempting to gain direct inventory control under the guise of MSME support and export facilitation. CAIT warns that such control would enable these firms to dominate the market through predatory pricing and anti-competitive practices, pushing small Kirana businesses out of the market. Despite existing FDI regulations designed to protect small traders, these firms allegedly bypass norms by controlling inventory through preferred sellers, as confirmed by ongoing Enforcement Directorate investigations. The Competition Commission of India has also found them guilty of market distortion through preferential treatment and deep discounting. CAIT demands the government reject any proposal allowing inventory control by these firms, enforce FDI regulations strictly, penalize violators, and expedite the notification of e-commerce policies to ensure a level playing field. The organization urges immediate action to prevent the monopolization of India’s retail sector, which supports the livelihoods of 40 crore people.
Confederation of All India Traders
(An Apex Body of Trade Federation Association & Non-Corporate Sector of India)
“Vyapar Bhawan”
925/1, Naiwala, Karol Bagh, New Delhi-110005.
Phone: C91-11-45032664, Telefax: +91-11-45032665
E-mail: teamcait@gamil.com Website : www.cait.in
Ref. No.: CAIT/25/01
18th March, 2025
Shri Piyush Goyal
Hon’ble Minister of Commerce & Industry
Government of India
New Delhi —110011
Subject: Urgent Intervention Needed — Prevent FDI-Backed E-Commerce Firms from Gaining Inventory Control Under the Guise of MSME Support & Export Facilitation
Hon’ble Sir,
1. The Confederation of All India Traders (CAIT) represents over 8 crore retail traders and supports the livelihoods of 40 crore Indians directly and indirectly dependent on retail and e-commerce. We have consistently advocated for the protection and growth of India’s retail sector.
2. We bring to your urgent attention the growing attempt by FDI-backed e-commerce firms to gain direct control over inventory under the false pretext of supporting MSMEs and facilitating exports. This move, combined with their ongoing anti-competitive and predatory practices, threatens the very survival of India’s 8 crore Kirana MSMEs.
3. Certain foreign-funded e-commerce entities and industry groups are lobbying the Government for permission to control inventory and manage distribution channels on their platforms. They are misrepresenting this as an initiative to help MSMEs and boost exports, whereas their true intention is to establish absolute market dominance.
4. These e-commerce giants exploit FDI inflows to engage in predatory pricing through pseudo-sellers, systematically diverting business away from Kirana MSMEs. Small traders, lacking access to such vast capital, are being pushed out of the market.
5. India’s FDI policy in retail is designed to protect small Kirana MSMEs from unfair competition. Any move to allow FDI-backed e-commerce firms to control inventory violates the fundamental principles of this policy.
6. These firms already violate FDI norms by controlling inventory through preferred sellers, a fact that has been confirmed by ongoing Enforcement Directorate (ED) investigations. Recent probes have exposed direct links between major e-commerce platforms and select sellers, proving that they manipulate inventory and pricing. Their latest attempt is merely a strategy to T ‘. legitimize their ongoing violations.
7. The Competition Commission of India (CCI) has found major e-commerce platforms guilty of market distortion by favoring select sellers and engaging in deep discounting. Their current request to control inventory is an attempt to legalize these unfair practices.
8. These firms have historically evaded regulations through misinformation and non-compliance. If they succeed in gaining inventory control, regulating them will become impossible, and any enforcement actions will collapse ultimately leading to the demise of 8 crore Kirana MSMEs.
9. While these companies falsely claim their intentions are to support MSMEs and enhance exports, their actual agenda is to eliminate small Kirana businesses and monopolize the market using FDI resources. This threatens the very foundation of India’s small retail sector and the livelihoods of 40 crore people.
Our Urgent Requests
10. Reject any proposal that allows FDI-backed e-commerce firms to control inventory. India’s FDI law must remain firm in preventing the destruction of 8 crore Kirana MSMEs.
11. Strictly enforce FDI regulations and take immediate action against violations, including predatory pricing and preferential treatment of pseudo-sellers. Violators must be penalized without delay to create a strong deterrent.
12. Expedite the notification of the E-Commerce Policy and Consumer Protection Rules to curb unfair market practices and ensure a level playing field for small traders.
We urge the Government to act swiftly and decisively to protect India’s retail sector from these predatory tactics. The survival of crores of Kirana stores, MSMEs and another crores of livelihoods depends on it.
Thank you. With kind regards
Yours truly
B.C. Bhartia
National President
Confederation of All India Traders (CAIT)
Contact Cell : +91-9422101317
Copy to:
1) Shri Praveen Khandelwal,
Member of Parliament,
Chandni Chowk Parliamentary Constituency
