India SME Forum, which has more than 86,000 members from about 270 different industries, has pleaded the PM to save the MSME sector from negative trickle down impact of the proposed measures.
The country’s largest association of micro, small and medium enterprises (MSMEs) has written to Prime Minister Narendra Modi requesting him to “relook” at the “growing compliance burden for ecommerce” in the proposed amendments to ecommerce regulations.
The new amendments proposed in the Consumer Protection (ecommerce) Rules 2020 will be “counterproductive for the growth of the ecommerce sector overall and the MSMEs dependent on the ecommerce sector”, it said.
Almost 70% of SME Forum’s members are engaged in selling products online with majority of them involved in B2B or business-to-business dealings while about 30% of them sell their products directly to consumers through various marketplaces.
“Many of the amendments may act as a roadblock to the sales prosperity unlocked by ecommerce marketplaces for MSMEs in their present form,” the letter by SME Forum said.
ET has seen a copy of the letter dated June 27, coinciding with International MSME Day.
The consumer affairs ministry had on June 21 unveiled the draft proposal aimed at further tightening rules for ecommerce marketplaces, including barring entities affiliated to those marketplaces from selling on the platforms and restricting flash sales.
This follows years of unabated allegations by small vendors and trade bodies that large ecommerce marketplaces like Amazon and Flipkart rampantly flouted rules.
The bill also seeks to strengthen consumer protections.
The ministry is currently seeking views from various stakeholders in the online retailing ecosystem.
“On one hand you are technologically and digitally motivating everybody to get online in the new digital India, (and) on the other hand you are culling their very ability to reach out to the consumer and to get more people onboard,” said Vinod Kumar, president of SME Forum. “That is contrary to your role in the first place.”