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What's in the cart? Single regulator for e-commerce sector in the offing

Draft policy may force e-commerce, social media companies to store data locally

Subhayan Chakraborty  |  New Delhi 

Representative Image
Representative Image

A national regulator for the sector with which all digital businesses will be legally bound to register has been recommended by a task force to the government. It has also suggested that major e-retailers and social media platforms be made to store the data of users in local servers, apart from a limited easing of foreign direct investment (FDI) rules for certain micro, small and medium enterprises (MSME). The establishment of a national body named the Central Consumer Protection Authority (CCPA), to act as the nodal agency for intra-government coordination on policies, is part of the Draft National Policy Framework on submitted by a task force headed by the commerce secretary on Monday. The body would hear complaints from both the public as well as e-commerce companies, the task force has said. To this end, “mandatory registration of all e-commerce operators, domestic or foreign, to provide a platform for e-commerce operators for complaints regarding fraudulent activities” has also been pointed out. ALSO READ: Sub-standard products? New rules to fix onus on e-commerce platforms However, a final decision on whether a national regulator will be created is yet to be decided, Commerce Secretary designate Anup Wadhawan said. Composed of both government and industry representatives, the final draft of recommendations by the task force will now be considered by the national think tank chaired by Commerce and Industry Minister However, no end date for the e-commerce policy is currently in place, despite the earlier deadline of October. The think tank, headed by Prabhu, held its second ever meeting on Monday after being constituted in April. Major players in India’s e-commerce sector including Ola, Indiamart, MakeMyTrip, Pepperfry, and Snapdeal, among others, were present. Industry bodies such as the Confederation of Indian Industry, Federation of Indian Chambers of Commerce & Industry were also there during the talks. On the other hand, the task force stressed the importance of storing the personal data of Indian consumers in local servers within the nation’s boundaries. This comes two days after official recommendations made by the Justice Srikrishna panel on data protection said the same thing. For this, infrastructure status has been suggested for data centres/server farms as well as easy access of physical infrastructure for setting up the centres. A “provision of direct, indirect tax benefits and Customs duties rebate” has also been mentioned in the draft recommendation, reviewed by Business Standard. ALSO READ: eBay 2.0: E-commerce major trying to play catch-up in Indian market The comprehensive e-commerce 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. “Pending inter-government discussions as well as public consultations whenever they are required, we will put out the final draft of the policy,” a senior commerce department official said.

A large number of ministries, key industry players and several regulators including the Trai and Competition Commission of India are involved in drafting the policy. Certain states have protested against the Centre’s alleged intrusion into their turf by framing laws for retail, which remains a state subject. rules may be eased for MSMEs The task force has also recommended allowing in domestic e-commerce firms in the sector selling directly to consumers. The relaxed norms have, however, only been suggested for those MSMEs that procure exclusively within India. Currently, norms allow foreign capital in e-commerce only when the entity acts as a marketplace facilitating other businesses and not selling directly to consumers. However, the major players in the sector have not pressed for FDI rules to be eased in the business-to-consumer (B2C) model. “We are of the view that an inventory-based model should be done away with to safeguard domestic startups and MSMEs. Even with 49 per cent inventory, global players can have good control over the company. The same has been flagged by many members as a backdoor entry for B2C,” a spokesperson for online marketplace ShopClues said. A separate wing in the (ED) to handle FDI-related grievances has been recommended. Currently, the commerce department forwards all complaints against major operators in the sector to the ED.

What's in the cart?

  • Draft e-commerce policy advocates tightening scrutiny of mergers
  • Centre to incentivise to store data of Indian customers locally
  • Government looks to boost home-grown RuPay’s use in online transactions
  • Measures come at a time when India is seeing investments flood in from deep-pocketed foreign players
  • Country’s e-commerce space is forecast to become a $200-billion market in a decade

First Published: Tue, July 31 2018. 03:11 IST
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