Quick Commerce Platforms in India Violate Law, Says CAIT

CAIT alleges Indian quick commerce platforms use predatory pricing, limit small retailers' market access, violating FDI, Competition, and Consumer laws.

The Confederation of All India Traders (CAIT) has expressed strong legal concerns over the operations of top quick-commerce (quick or hyper) platforms including Zomato owned Blinkit, Swiggy Instamart, Yepto in India. In a white paper released Wednesday, the trade body accused the platforms of breaking multiple domestic legal frameworks – including Foreign Direct Investment (FDI) norm, Competition Act, and Consumer Protection Act.

According to CAIT, these platforms have been lauded to have collected over Rs 54,000 crore of FDI but with hardly any of that being given to build actual assets. FDI guidelines are designed to promote long term growth through infrastructure development not operational losses resulting from predatory pricing, the trade body argues.

The CAIT alleges that certain online platforms violate legal norms by engaging in "closed nexus" deals with selective sellers, breaching foreign direct investment regulations and preventing foreign-backed marketplaces from holding inventory. They argue these platforms infringe the Competition Act by hindering small retailers through exclusive agreements, deep discounts, and predatory pricing. Additionally, the white paper claims these practices violate the Consumer Protection Act by lacking transparency about sellers and products, jeopardizing the livelihoods of millions of kirana store owners.

Regulatory bodies FSSAI and CCPA highlight non-compliance of quick commerce platforms, increasing legal scrutiny. Blinkit, Swiggy Instamart, and Zepto did not respond to inquiries at the time of publication.