E-commerce policy in six months; to tackle data privacy and tax issues

On the issue of a potential regulator for the sector, the Commerce Secretary said it would depend on whether the policy needed legislative requirements and new regulations or existing laws sufficed

The government has announced that a framework for an e-commerce policy will be prepared within the next six months.

The comprehensive policy is expected to focus on all aspects of the e-commerce business and consumers. It will encompass data privacy and taxation, apart from a host of technical aspects such as technology transfer, server localisation and connectivity issues.

Commerce Secretary Rita Teaotia said on Tuesday that a large number of ministries, key industry players and several regulators, including the Competition Commission of India and the Telecom Regulatory Authority of India, would be involved in drafting the policy. The think tank tasked with drafting the policy held its first meeting on Tuesday. 

On the issue of a potential regulator for the sector, Teaotia said it would depend on whether the policy needed legislative requirements and new regulations or existing laws sufficed. 

A task force will now be constituted and is expected to submit recommendations to the e-commerce think tank within five months. The think tank, in turn, will tentatively have a month to finalise the framework. 

Major e-commerce companies such as e-marketplaces Flipkart and Snapdeal, e-wallet major Paytm and service provider MakeMyTrip were out in full force on Tuesday at the stakeholder consultation meet. Apart from data privacy, most firms were vocal about taxation and allegations made against them by brick-and-mortar retailers on the issue of excessive discounts being offered. 

“The discussion has been quite straightforward that no discounting is allowed and the fact that no inventory ownership, directly or indirectly, is allowed by online marketplaces. However, there is obviously a lot of concern about whether this is being effectively implemented or not, and if not, what is going to be done about it,” Kunal Bahl, Snapdeal chief executive officer, said.

A senior commerce ministry official said that an e-commerce policy may not go hand in hand with India’s arguments on e-commerce at the World Trade Organization (WTO). 

Over the past two years, developed nations have continuously pushed for a proposed set of global rules on e-commerce. India has argued that the move would sideline discussions on food security and other development-based issues important to developing nations. But the domestic e-commerce industry has also remained cold to the proposal, fearing that the new rules could provide a pretext for unfair mandatory market access to foreign companies.  “Because this is a WTO-led agenda, our suggestion has been that the access provided to India’s data, platform and markets should be reciprocal. In a way, India’s open market is a big advantage to global companies but the same might not be true for domestic ones,” Paytm chief Vijay Shekhar Sharma said.