New standing committee of secretaries on e-commerce starts deliberations

With multiple ministries arguing against the policy and the PMO overseeing the deliberations, the plans to bring out the final draft by the end of October are unlikely to materialise

A new standing committee of secretaries, constituted to look into the issues of the e-commerce sector, held its first meeting on Thursday. The panel has been formed at a time when the commerce ministry is facing criticism from the industry as well as government agencies for some proposals in the draft e-commerce policy.   

With multiple ministries arguing against the policy and the Prime Minister’s Office overseeing the deliberations, the plans to bring out the final draft by the end of October are unlikely to materialise. 

“The new panel will continue to discuss all issues of the e-commerce space. It will meet every month, but the date of the next meeting has not been decided yet," a senior official said. He added that no decision had been taken regarding proposals to set up a regulator and to allow limited foreign direct investment (FDI) in the sector in the inventory model. 

The mandate of the new panel was not immediately clear as the previous group of secretaries, which still exists, was formed to discuss the same issues. 

The new panel is headed by Department of Industrial Policy and Promotion (DIPP) Secretary Ramesh Abhishek, and includes members from other ministries like finance, defence, and electronics and information technology, apart from the Reserve Bank and the Enforcement Directorate. 

Major retailer associations, trade bodies, and even online seller associations have opposed most proposals in the draft policy, alleging that these favour e-commerce players such as Ola and Paytm. They are also critical of the proposal to introduce FDI in the inventory-based model of e-commerce, up to 49 per cent for Indian-owned businesses that procure exclusively from within India. The current norms allow foreign capital in e-commerce only when the entity acts as a marketplace, facilitating other businesses and not selling directly to consumers.

According to sources, smaller Singapore- and US-based venture capital funds, retail associations, and trader bodies, such as the Confederation of All India Traders (CAIT) and Swadeshi Jagran Manch (SJM), are planning to approach the government to put pressure on the commerce ministry. The idea is to make the ministry consider a different set of proposals, keeping in mind the interests of all players. 

Smaller venture funds also said they were in touch with representatives of major investors such as SoftBank Group and Tiger Global to get them into the discussions they plan with the government. 

The commerce department would soon initiate a second set of stakeholder discussions, sources said. Earlier discussions were held under the authority of the commerce secretary, but talks had remained deadlocked.