Online retail firms, social media cos may have to store user data in India

Online retail companies like Flipkart and social media firms may have to store user data exclusively in India, according to a draft national policy for the e-commerce sector.

The government may also consider an amendment in the Companies Act so as to facilitate founders to have control over their e-commerce companies, despite their small shareholding, according to official sources.

Data that would be required to be stored exclusively in India includes "community data collected by IoT (Internet of Things) devices in public space; and data generated by users in India from various sources, including e-commerce platforms, social media, search engines etc", according to the draft policy.

The policy also proposes that the government would have access to data stored in India for national security and public policy objectives.

It suggested that data generated by a consumer could be permitted to be portable amongst platforms in India as per the consumer's request.

Further, a level-playing field would be provided to domestic players by ensuring that foreign websites involved in e-commerce transactions from India also follow the same rules.

The draft has suggested setting up of a separate wing in the Directorate of Enforcement to handle complaints related to implementation of guidelines related to foreign direct investment in the e-commerce sector.

Bulk purchase of branded goods, especially mobile phones, which lead to price distortions in market place may be banned.

The government has set up a high-level think tank under Commerce Minister Suresh Prabhu to prepare a national e-commerce policy. The second meeting of the think tank, which includes members from various government departments and private sector, is going on in the national capital.

The draft policy was to be taken up for discussion during the meeting, sources said.