Swadeshi Jagran Manch claims that Chinese e-commerce firms are evading Indian laws, disrupting the MSME trade market
New Delhi(ET):The Rashtriya Swayamsevak Sangh’s (RSS) economic wing Swadeshi Jagran Manch (SJM) is set to train its guns on the thriving new market for Chinese e-commerce apps.
The Manch’s internal research team is learnt to have assessed that Chinese e-commerce firms currently bag over two lakh orders per day from Indian shoppers and are delivering goods via couriers and postal gift shipments, bypassing and evading a range of Indian laws on payment gateways, custom duties and GST and are also disrupting the MSME trade market in India.
SJM is set to demand that all product shipments from China to India be channelised through the customs route and till then, all postal gift shipments from China be stopped, download of non-GST compliant and unregistered Chinese e-commerce apps be banned and shut payment gateways for them.
The RSS affiliate has already red-flagged the issue to the commerce ministry and is now preparing to take the issue to the prime minister himself. Government is already considering acting on the issue.
“We have talked to authorities in the commerce ministry on the issue and they are sympathetic to it. We feel that this issue, however, requires a concerted government effort to check the situation and so, we will take it up with PMO and RBI as well as the finance ministry,” said Ashwani Mahajan, national co-convenor of the SJM.
SJM argues that the Chinese e-commerce sites or sellers like Shein, AliExpress and Club Factory among others, are misusing a clause in India’s Foreign Trade (D & R) Act which exempts gifts of up to ₹5,000 received from abroad by persons living in India from custom and other duties.
The exemption was mainly aimed at low-value gifts sent by NRIs to family back home.
Custom duties apart, GST is also not levied on these sales and there are indications that identities of Indian NRI workers employed in west Asia are being misused in some of these gift shipments, the Manch said.
It also points out that China Post appears to be heavily subsidising packages and delivery cost to products shipped to India to promote its own small industry, which is targeting India’s younger population via social media.
Since e-commerce sites selling these products are not registered as business entities in India, there are no easy processes for grievance redressal and returns and hence the risk of ‘hazardous, prohibited, unsafe or substandard goods arriving in India’ also looms large, the Manch will point out to the government.
ET has learnt that SJM will demand mandatory registration of e-commerce sites and apps as the importer on record, MRPs and invoices for all their products and higher diligence by India Post, including thresholds of shipment booking system, to ensure that the FT (D & R) Act is not misused.