The new e-commerce FDI norms have come into effect from February 1. The rules will apply to food ordering and delivery applications. As per the new regulations by FDI food ordering and delivering companies like Swiggy, Zomato and UberEats would be restricted from operating inventory-based models and influencing prices of the food they list on their apps.
Earlier in this January, all these companies have approached the Department of Industrial Policy and Promotion (DIPP) regarding this matter. The National Restaurant Association of India (NRAI) is representing over one lakh outlets across India.
NRAI President Rahul Singh said, “As the restaurant sector comprises lakhs of small businesses run by entrepreneurs and families, their interests need to be kept in mind. The policy should provide a fair and non-discriminatory framework. In this rush to acquire customers at any cost and intense competition between e-commerce behemoths, we need to prevent any adversities on the brick-and-mortar players.”
Initially, when this policy was released in December 2018, it was mainly targeting online shopping platforms like Flipkart and Amazon. The aim was to protect the interests of small businessmen and traders. As per the new rules, these players will have limited control over the sellers on their platform.
As per the accusations, theses app-based companies are addicting clients by giving the lucrative discounts, stated by NRAI. Around 500-mid-sized eateries/restaurants had complained to the Competition Commission of India against the deep discounts, inventory control and promotion of private labels by these app-based companies.