Traders Across India Unite To Combat Willful Payment Defaults

The decision was taken during All India Trade Conference, recently held in Mumbai and organised by the Federation of Associations of Maharashtra (FAM). FAM had invited representatives of various traders’ associations from across the country to forge a unity among themselves. One of the major outcomes of the meeting was the agreement to share details of habitual defaulters. 

“Earlier, defaulters were blacklisted in specific regions only. Now, their names will be shared with associations across the country. We have passed a resolution to this effect. A defaulter feels the pressure because of such interventions, and is forced to pay money to the seller,” said Jitendra Shah, president of FAM, an umbrella organisation representing nearly 750 trader associations in Maharashtra. 

Representatives from organisations such as FICCI, Indian Merchant Chambers, Bharatiya Udyog Vyapar Mandal, Federation of All India Vyapar Mandal (FAIYM), CAIT, and local associations from around 20 states participated in the event. 

In these types of trades, payments typically follow a credit cycle of 90-100 days, with post-dated cheques being a common practice. Still, many traders face defaults. Jayendra Tanna, president of FAIYM, pointed out that the informal trade sector is one of the largest sources of employment in the country, so it’s crucial to have systems in place that protect traders financially. “Right now, traders are facing multiple challenges like slowdown in demand, complex GST regime, and other issues. In such a situation, traders would benefit if they get payment on time and their cash flow is ensured,” he said. 

Industry leaders note that non-payment of dues has become a major issue across India. While some cases can be resolved through personal efforts by the traders, others need escalation. “This problem exists in any sector where goods are bought on credit. Sellers often serve legal notices. Even then, the problem remains unresolved. This calls for an interstate collaboration, otherwise fraudulent buyers will keep on duping sellers in different states,” opined Bhupendra Singh Sobti, national assistant general secretary of FAIYM and its state president in Uttar Pradesh.

Trade leaders also agree that responsibility lies on both sides—sellers too are sometimes involved in malpractices. This highlights the need for strong coordination and arbitration between trade bodies in different states. Sushil Poddar, president of FAIYM in West Bengal, said there have been reports of sellers failing to deliver goods or honour promised discounts. “So, there are malpractices from both sides. However, such a mechanism will go a long way in arbitration and resolution of disputes,” he said.