CAIT suggests imposition of minimum operating price for products

NEW DELHI: Traders body CAIT on Sunday suggested the government to impose a "minimum operating price" for products, alleging that traders are at the receiving end of a pricing onslaught posed by e-commerce firms and brands in collusion with banks.

The Confederation of All India Traders (CAIT) has written a letter in this regard to Union Commerce and Industry Minister Piyush Goyal.

"Under the circumstances and visualising it as a price war, we suggest it is the high time when the government must step in and enforce the fundamental of Minimum Operating Price (MOP) which is the price consisting of landing price, operational cost and reasonable profit margin and below the MOP no product should be sold in the market," CAIT said in the letter.

The traders' body alleged that e-commerce companies and brands in collusion with banks, by charging much lower price than the actual market value are depriving the government of GST and other revenue.

"It is the responsibility of the Brands to advise to their buyers to sell their products at MOP to maintain the market hygiene keeping in mind that retailer should earn at least minimum margin to cover his operational cost and earn very thin margin," CAIT suggested in the letter to Goyal.

It said there should be a uniform policy of discounting by brands both for online and offline trade.

"Cash back on credit cards given by the banks should also be made applicable to offline trade. There should not be any kind of exclusivity either for online or offline trade. Upgrade or buyback offer by brands should remain the same for both offline and online trade. All schemes of the brands should be made available to online and offline trade in a transparent manner," CAIT said, arguing that this will create a level-playing field for every player in retail trade.

In this context, we suggest that the government should initiate a discussion with all stake-holders on MOP and frame rules for the same, the traders' body observed.

It also suggested that the government should constitute a Regulatory Authority to regulate and monitor all verticals of retail trade including small retail, big retail, e-commerce and direct selling besides MOP, and if anyone wants to offer any scheme, the same should be approved by the Regulatory Authority.

"The cash on delivery (COD) in e-commerce should not be allowed and all deliveries in online sale should accept digital payments only. We are sure that it will receive your kind attention and you will be pleased to take necessary action in order to curb unethical and unfair business practices of e commerce companies and restructuring of retail trade of India which is a key to vision of Prime Minister to make India a 5 trillion dollar economy by 2024," CAIT said.