The draft e-commerce policy is wrongly addressing a slew of things. It needs to bring in corrections before it is too late.
India signed into the e-commerce super-highway along with the rest of the world in the 2000s that transfigured the way commercial transactions happen. For sure, its fundamentals were laid in the 1990s when critical policy changes were initiated.
Now with a view to establishing legal limits for cross border data flow and handling of sensitive data by both domestic and overseas business entities, the Department of Industry and Internal Trade of India has released the draft National e-commerce policy. Various crucial concerns incorporated in the policy are: control over data, development of infrastructure, economic market places, regulatory issues, the formation of e-commerce courts, stimulating the domestic digital economy, export promotion, and levy of customs duty on electronic transmissions.
WILL IT HIT OUT OR GET OUT?
To tighten the regulation of the national e-commerce industry the policy has been introduced. Experts, however, point out to several issues, the key amongst which are outlined here.
• The policy levies a restriction on how much the organisation related to the e-commerce platform can sell on a particular portal and prohibits any special treatment to any supplier. This will help less and obstruct many. Cash-back offers and privileged packages like Amazon Prime and Flipkart Plus will experience bad days.
• The policy norms will badly hit frontline e-commerce players who have been attracting customers by offering deep discounts. As customers can no longer get these and numerous selective promotional schemes, the move looks disturbing at a time when e-commerce entities are providing jobs and investing considerable money in India.
• According to the policy, an organisation in which any e-commerce entity or its group has an equity contribution or its inventory is being controlled by any e-commerce entity, cannot sell its merchandise on the platform run by such marketplace entity. For example, Cloudtail, which is a joint venture between N R Narayana Murthy’s Catamaran Ventures and Amazon, cannot sell on Amazon and favourable terms for warehousing or logistics cannot be given for Cloudtail.
• The policy restricts sellers from selling more than 25 per cent of products on an e-commerce stage. This will dishearten many small or medium entrepreneurs who flourish even without brick and mortar. Also, their production and distribution costs will also rise steeply.
• The policy says that all data generated in India should belong to Indians and it is a national asset that the government keeps in faith for its citizens. Thus, the draft policy indirectly allows the government to manage the personal data of citizens. This is directly at odds with the references of the Justice Srikrishna Committee and the pronouncement of the Supreme Court relating to the right to privacy.
• The policy specifies that data collected in India and stored abroad cannot be made available to anyone outside India and the Indian government must have access to this data at all times. This is bad allowing the government to nationalise personal data instead of safeguarding it. The policy has also suggested forbidding all gifts shipped to India through e-commerce Avenue.
In short, the draft e-commerce policy which has been designed to tackle and handle challenges of e-commerce industry in India has very little to applaud. The problems of e-commerce industry warrant smart solutions rather than hamfisted or awkward ones. Therefore, policymakers have to focus on erasing the negative impressions in the minds of foreign investors due to faulty policy formulations and take quick action to plug the loopholes. Importantly, rule makers will set aside the compulsion of politics and concentrate on the greatest good for the highest number.
This will definitely bring cheer on the faces of many, and they will say ‘Oh, happy days are here.’
