The Confederation of All India Traders (CAIT), a prominent national organization representing Indian traders, has raised alarms over alleged legal and regulatory violations by quick commerce platforms. In a letter addressed to Union Commerce Minister Piyush Goyal, CAIT has accused companies such as Blinkit, Zepto, and Swiggy Instamart of exploiting foreign investments to disrupt India’s retail ecosystem.

Allegations of Misusing Foreign Investments
CAIT’s national president, BC Bhartia, has alleged that quick commerce platforms misuse Foreign Direct Investment (FDI) funds to gain an unfair edge over traditional retail outlets. According to Bhartia, these companies engage in practices that include manipulating suppliers, controlling inventory, and dictating prices, all of which enable them to undercut small grocery stores.

He further highlighted that over ₹54,000 crore secured through FDI by these companies has not been invested in infrastructure or long-term assets. Instead, Bhartia claimed, the funds are being used to offset business losses, dominate supply chains, and offer steep discounts via select vendors. These practices, according to CAIT, threaten the survival of over 30 million small retailers across India.

Violations and Threats to the Retail Sector
CAIT secretary general Praveen Khandelwal echoed Bhartia’s concerns, accusing quick commerce platforms of violating FDI policies and provisions of the Competition Act. He stated that these companies destabilize the retail sector by sidelining small retailers and fostering an uneven playing field.

Khandelwal also pointed out the existence of numerous dark stores operated by these platforms, which he argued violate regulations prohibiting the establishment of retail outlets by foreign-funded companies. Additionally, he alleged that quick commerce platforms strike exclusive agreements with select vendors, sidelining independent retailers and stifling competition. The concealment of vendor details from consumers, he argued, breaches both the Competition Act and consumer rights.

Call for Stringent Oversight
CAIT has warned that the unchecked rise of foreign-funded quick commerce companies poses a significant threat to India’s small retail sector. The organization has called for immediate government action to ensure adherence to the country’s e-commerce policies and consumer protection rules.

In its letter, CAIT emphasized the need for stringent oversight of these platforms to curb practices such as price manipulation and one-sided agreements. The organization urged the government to integrate quick commerce platforms with local kirana stores, as suggested by Union Commerce Minister Piyush Goyal in recent remarks.

Future Action Plans
To address these pressing concerns, CAIT has shared its white paper on the issue with Minister Goyal and the Chief Ministers of all states. The organization has also announced a two-day national seminar in Delhi on January 6-7, where traders will deliberate on these challenges and other critical trade issues.

Additionally, Khandelwal revealed that a trader delegation plans to meet with Minister Goyal soon to further discuss the issue. CAIT remains committed to safeguarding the interests of India’s small retailers and ensuring fair competition in the country’s retail ecosystem.

Author: Sonali kamble