Quick Commerce Firms Violate FDI Norms, Disrupt Fair Market: MP Praveen Khandelwal

Quick commerce and e-commerce platforms are violating India’s FDI policy, exploiting labour, and distorting fair competition, said Lok Sabha MP Praveen Khandelwal. He criticised companies like Zepto, Blinkit, and Instamart for aggressively expanding using foreign capital while undermining small retailers through predatory pricing. “India doesn’t need 10-minute deliveries when local shops are available in every corner of the country,” he said, warning that these platforms are threatening the backbone of India’s retail ecosystem.

Just as the country once fought for salt during the freedom struggle, it must now resist the growing influence of digital marketplaces that are targeting Indian sellers, he added. Drawing a sharp comparison, Khandelwal described these platforms as the new-age East India Company leveraging data, discounts, and digital dominance to capture markets and sideline traditional trade.

He further alleged that beyond violating FDI norms, these platforms are also engaging in exploitative labour practices and anti-competitive behaviour. Quick commerce and e-commerce companies, he said, are increasingly using algorithms, artificial intelligence (AI), and machine learning (ML) to shape consumer preferences and drive excessive consumption, raising serious concerns about their impact on the economy and society.

Khandelwal claimed that around 1.5 lakh mobile shops have shut down because of the unchecked rise of these platforms. He pointed out that while these companies have attracted Rs 54,000 crore in foreign investment, only 2.5% has gone into building assets. The majority, he said, has been used to fund deep discounts and predatory pricing strategies.

He also alleged that these platforms continue to own and operate dark stores, despite FDI rules clearly prohibiting such ownership. In addition, the pressure to fulfil 10-minute deliveries is causing both mental and physical stress to the workforce, amounting to exploitation.

Khandelwal was speaking at the national conclave titled 'Cruel Face of Quick Commerce and E-Commerce', was organized in collaboration with the All India Mobile Retailers Association (AIMRA) and the All India Consumer Products Distributors Federation (AICPDF). It was held on April 22 at the Constitution Club of India. The conclave also saw the release of the white paper by the associations which highlighted that “these platforms create entry barriers and indulge in gate keeping through a closed system of few preferred sellers..” This in turn, leads to restriction in the market place to both third party sellers and consumers.

Speaking at the conclave, Dhairyashil Patil, National President of AICPDF, stated that while he had earlier reported the closure of 2 lakh kirana stores due to the rise of quick commerce platforms, the number has now surged to 10 lakh.

This is not the first time the Confederation of All India Traders (CAIT) has expressed concern about quick commerce and e-commerce platforms. Previously also, the CAIT pointed out that quick commerce platforms violate FDI norms and promote predatory pricing. This in turn, impacts small retail traders. In December last year, the CAIT also wrote to Union Minister Piyush Goyal and mentioned that quick commerce platforms are violating laws. It was also highlighted that these platforms are misusing foreign investments to distort the retail market.

Further, the traders association had indicated earlier that In its letter, CAIT claimed these practices are harming small shopkeepers and creating unfair competition. Further, a white paper with details of the issue was also released earlier and was sent to chief ministers of all states for further attention. The white paper released earlier had indicated, ‘Unchecked growth driven by foreign capital poses a significant threat to India’s small retail ecosystem.”

In November last year, the CAIT also wrote to Finance Minister Nirmala Sitharaman where they indicated that the Competition Comission of India (CCI) have been slow to act on complaints against e-commerce platforms such as Amazon and Flipkart. Interestingly, Union Minister Piyush Goyal, in August last year had also criticised e-commerce platform Amazon. He said at an event, “They are an e-commerce platform, which legally cannot do business-to-consumer.

They create entities where Indians contribute to making those entities, sadly. Then they get caught, so they start closing down those entities.”

Meanwhile, quick commerce has been growing rapidly in India. According to a report by Bain & Company and Flipkart, it made up more than two-thirds of all online retail orders last year, with its market size increasing nearly five times since 2022 to reach $6–7 billion. The report also says that quick commerce is expected to grow by over 40% each year until 2030, as it expands into more product categories, regions, and types of customers.