Quick commerce platforms spearheaded by giants like Swiggy, Zepto, and Blinkit are jeopardising the livelihoods of nearly three crore kirana stores across India --- a segment which provides direct employment opportunities to about 25 crore people, said Praveen Khandelwal, Secretary General of the Confederation of All India Traders (CAIT).
Raising concerns over the impact of quick commerce on India’s retail sector, he said these companies are openly violating FDI, CCI, and FEMA rules and regulations. “Backed by huge foreign investments, they have emerged as the new East India Company who wants to break the retail economy,” said Khandelwal.
The CAIT, in a newly released white paper, accused quick commerce players of exploiting Foreign Direct Investment (FDI) norms and circumventing the Competition Act to gain a foothold in India’s retail economy. It also alleged that these players use predatory pricing, enabled by substantial foreign investments, to lure customers away from traditional retailers.
Advertisement
The CAIT, in a newly released white paper, accused quick commerce players of exploiting Foreign Direct Investment (FDI) norms and circumventing the Competition Act to gain a foothold in India’s retail economy. It also alleged that these players use predatory pricing, enabled by substantial foreign investments, to lure customers away from traditional retailers.
He claimed that these companies offer discounts funded by international investors which makes it increasingly difficult for kirana stores to survive in the competitive marketplace. In addition, the CAIT official also asserted that companies are operating “dark stores”—small warehouses used to store inventory and fulfill rapid delivery orders—despite FDI restrictions on holding inventory.
Advertisement
Citing examples, Khandelwal noted Blinkit, which currently has a 46% market share in quick commerce, operates 451 dark stores. Similarly, Instamart, with a 27% market share, has around 450 dark stores, while Zepto, holding 21% of the market, has 330 dark stores.
He further pointed out that these platforms use storage units for packaging and dispatching products, which is a direct violation of FDI policy that prohibits e-commerce players from maintaining inventories.
His criticism echoes sentiments recently voiced by Union Minister Piyush Goyal, who questioned the aggressive expansion of quick commerce and its implications on FDI policy.
According to Khandelwal, these companies have collectively raised Rs 54,000 crore in FDI, but only about Rs 1,300 crore (approximately 2.5%) has been invested in building tangible assets. The majority of the funds, he stated, have instead gone towards sustaining deep discounts and other pricing strategies that put traditional kirana stores at a disadvantage.
He also mentioned possible breaches of the Foreign Exchange Management Act (FEMA) due to the significant discounts offered by these platforms, suggesting that they may be compensating for losses through foreign investment rather than through organic market growth.
Advertisement
In light of these concerns, CAIT has urged the central government to enforce existing FDI and competition laws more stringently to protect traditional retailers from what it sees as unfair practices in the quick commerce sector. Khandelwal insisted that without intervention, India’s vast network of kirana stores may face an existential threat from these well-funded, fast-growing delivery companies.
He added that the white paper will be shared with the concerned departments, and ministries and with government support, the voices of traditional retailers can be amplified against what he described as the “evil” of quick commerce, preserving the livelihoods of millions and sustaining India’s traditional retail landscape.
Just one email a week