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Regulatory Body for Ecommerce Marketplaces

This petition had 390 supporters

There has been a lot of hue, cry, debate, discussions regarding FDI clarification in ecommerce maketplaces.

But who is regulating them?

Take this,

  • Banks use to charge exorbitant interest on loans, minuscule interest on deposits, charge exorbitant transaction charges etc etc.
  • Reserve Bank of India, formed through a statute of Central Government, changed this and created standards, regulations, monitoring bodies etc in order to creating a level playing field. And banks started getting rated on the basis of their service and relationship management.
  • Another example, Insurance company send foot soldiers in the name of insurance agent instead of full time employees and asks you to take policy, pay premium on trust that in future they will compensate loss.
  • What if, they would charge you 1 crores as premium for a policy of 1 lakh policy? And then force you to take such a policy in order to get your house/car etc registered with Municipal Corporation / RTO.
  • Such a practice is not possible because of IRDA.
  • What about your electricity company, it decides to charge 3x power charges from tomorrow onwards.
  • What will you do? 1) Pay up? 2) Stop consuming electricity? what about money spent on appliances? 3) Start your own powerplant.
  • CERC makes sure that electricity companies do not carry out such practices.
  • It is because of TRAI that we have stopped paying incoming charges on mobile calls. That every person in the country is now trusting telecoms with a cellular connection to run their mobile phones.
  • SEBI is the most known regulatory body.

There are various regulatory bodies in this country.

All bodies have been formed in those industries where there is public trust and money involved.

The institutions to whom the regulations apply, have to follow these norms in order to carry out business in India.

As a policy, FDI is regulated in all these industries which are having a regulatory body.

Now that GOI has clarified FDI in ecommerce marketplaces, it should also bring in regulation to control the marketplaces.

DIPP via Press Note 3 / 2016 had brought in guidelines for ecommerce marketplaces. These guidelines were notified after a year in 2017 by RBI under FEMA.

Even today the marketplaces are openly violating these rules and there is no enforcement from government.

When AIOVA requests the DIPP and Commerce Ministry to take action against certain problems in a marketplace, they have 2 standard responses :

1) For FDI related matters talk to RBI

2) For Non- FDI related matters talk to Consumer affairs ministry.

We met with Consumers Affairs ministry who themselves are confused as trade matters do not fall under their jurisdiction.

Currently, Consumer Affairs Ministry is waiting for response from Commerce Ministry on AIOVA representation since past 2 months.

We receive cases from sellers where marketplaces are refusing their claims by counter claiming dues from the seller itself.

Such disputes will then go to courts, where already crores of cases are pending, a normal seller will die an instant death in legal bills. Further, outcome of each case will be separate across the country on the basis of the lawyer, judge, region etc.

We require special tribunals to take up sellers issues they way consumer courts, electricity tribunals, debt recovery tribunals and others have been set up.


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