New e-commerce policy likely to take effect after Lok Sabha polls

Comments on draft policy are now open till March 31

The government has decided to extend the date of submission of stakeholder comments on the draft e-commerce policy to March 31. 

This has ensured that there will be no chance for the policy to take effect before the general elections in April.

The decision to extend the initial submission date of March 9 was taken on Friday after 30 online majors such as Flipkart, Snapdeal, Ola, Uber, Amazon, Netflix and Microsoft met government officials and raised a series of issues on the current draft policy, a senior official from the Department for Promotion of Industry and Internal Trade (DPIIT) said.

Most participants on Friday’s meeting suggested that three separate policies be carved out of the current draft. Apart from a demand to incorporate rules on banking and insurance in the draft, online businesses have clashed with the government on multiple issues, prime among them being a tug-of-war over consumer data.

Battle over data

Protection of data had stood out as the dominant theme of the much-awaited e-commerce draft report released last month. 

Among other rules, the draft has proposed to grant domestic industry a three-year window for making a shift to mandatory local data storage requirements and pushed for strict restriction on companies sharing the data of consumers for commercial purposes.  

“By tracking the search and browsing histories, online retail websites are able to target consumers with tailor-made marketing content,” the draft says. However, the industry has continued to push for a watering down of this rule by asking for a “limited sharing of consumer data for commercial purposes after suitable customer consent.”

On the other hand, the draft also said, “Access to data for purposes of maintaining and ensuring law and order cannot be over emphasised.” But major players such as Flipkart and Microsoft have argued that such government access to consumer data represents a similar set of risk and breaches conventions, a person present during the meeting said. 

As a result, they have demanded that a separate data policy for the e-commerce sector be crafted and released before the elections.

Issues galore

Aiming to step up onshore digital commerce, the draft also hinted at regulating Chinese e-commerce apps, under fire for dodging tariff duties and not maintaining offices in the country. Some Chinese firms like Aliexpress and Shein.com may be called for discussions, a government official said. 

The government has also clashed with stakeholders like the Confederation of All Indian Traders, which demanded a specific regulator for the sector. “We feel the Enforcement Directorate should continue to be the agency in charge of investigations into norm violations,” the official added. 

The draft recognises the standing group of secretaries on e-commerce as the primary body for regulating the high-growth sector. 

The draft is also expected to by opposed by the information technology ministry, which alleges that it was not fully consulted during its preparation, and now harbours serious reservations against it, sources in the ministry said.

The DPIIT has also taken note of repeated complaints of the search bias leveled against Google. Recently, the Competition Commission of India or CCI said Google abused its dominant position as a search engine major and fined it Rs 136 crore. The draft policy may include technical ‘failsafes’ to reduce chances of this happening.