Lok Sabha Question No. 4129 (UNSTARRED), answered on 2025-03-25
Subject: Imbalance in Trade
Ministry: COMMERCE AND INDUSTRY
Asked by: Shri Rajesh Ranjan

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY

## DEPARTMENT FOR PROMOTION OF INDUSTRY AND INTERNAL TRADE

## LOK SABHA

UNSTARRED QUESTION NO. 4129.

TO BE ANSWERED ON TUESDAY, THE 25 TH  MARCH, 2025.

## IMBALANCE IN TRADE

## 4129.  SHRI RAJESH RANJAN:

Will the Minister of COMMERCE AND INDUSTRY be pleased to state: वाणिज्य एवं उद्योग मंत्री

- (a) whether it is a fact that due to the bulk buying power, aggressive pricing and wide reach of the big firms, small retailers are suffering serious losses, leading to imbalance in trade, closure of small businesses and increase in unemployment;
- (b) if so, whether the Government has formulated any plan or policy to solve such problem; and
- (c) if so, the details thereof?

## ANSWER

## वाणिज्य एवं उद्योग मंत्रालय में राज्य मंत्री ( श्री णिणिन प्रसाद ) THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE & INDUSTRY (SHRI JITIN PRASADA)

- (a) to (c): Pricing and discounting of products are business decisions driven by market forces.  However,  imposition  of  unfair  or  discriminatory  prices  (including predatory  pricing)  by  a  dominant  enterprise  or  group  is  prohibited  under provisions  of  Section  4  of  the  Competition Act, 2002. The Competition Commission of India  (CCI)  established  under the said Act decides matters of anti-competitive practices, including, inter-alia, predatory pricing, on a reference by the aggrieved party. Action is taken as and when such allegations of anomalies and violations of existing laws are brought to the notice of the Government.

DPIIT Press Note 3 of 2016 having Guidelines for FDI on e-commerce was issued on 29 March, 2016. Press Note 2(2018) was issued by DPIIT on 26 December, 2018 to provide further clarification on FDI policy in relation to ecommerce.  Clause  (ix)  of  Press  Note  2(2018)  stipulates  that  e-commerce entities providing market place will not directly or indirectly influence the sale price  of  goods  or  services  and  shall  maintain  level  playing field.  Services should be provided by e-commerce marketplace entity or other entities in which e-commerce  marketplace  entity  has  direct  or  indirect  equity  participation  or common control, to vendors on the platform at arm's length and in a fair and non- discriminatory  manner.  Such  services  will  include  but  not  be  limited  to fulfilment, logistics, warehousing, advertisement/ marketing, payments, financing etc. Cash back provided by group companies of marketplace entity to buyers shall be fair and non- discriminatory.  For  the  purposes  of  this  clause, provision  of  services  to  any  vendor  on such  terms  which  are  not  made available to other vendors in similar circumstances will be deemed unfair and discriminatory.  Any  violation  of  FDI  regulations  is  covered  by  the  penal provision of FEMA,  1999. RBI administers FEMA  and  Directorate of Enforcement (ED) is the authority for enforcement action under FEMA.

Government has been focusing on protection of the interest of small retailers and distributors. Various measures in the form of Acts, Rules and Policies have been put in place  to  ensure  a  level  playing  field  and  act  against  practicing of  anti-competitive conduct by big e-commerce platforms. In addition to the Competition Act,  2002,  the  e-  commerce sector is governed by a comprehensive legislative framework consisting of  the  Acts,  Rules  and Policies such as Consumer Protection Act, 2019; Central Goods and Services (CGST) Act, 2017; Information Technology Act, 2000; Payment and Settlement Systems Act, 2007; Income Tax Act, 1961; Companies Act, 2013; Copyright Act,  1957 etc.

The Department for Promotion of Industry and Internal Trade (DPIIT) has also pioneered the initiative of Open Network for Digital Commerce (ONDC). The initiative  aims  at  promoting  open  networks  for  all  aspects  of  exchange  of goods  and  services  over  digital  or  electronic  networks.  ONDC  makes  eCommerce more inclusive wherein small and medium-sized businesses can use any ONDC compatible applications instead of being governed by  specific platform centric policies. This provides  multiple options to them  to  be discoverable  over  network  and  conduct  business.  It  also  encourages  easy adoption of digital means by the small retailers and distributors, who may be currently not on digital commerce networks.

********