NATIONAL
E-COMMERCE POLICY – ECONOMY
News:
National e-commerce
policy in final stages; to be presented before top-level: official
What's
in the news?
●
The proposed national e-commerce policy
being formulated by the Commerce and
Industry Ministry is in the final stages and no new draft policy will be
issued now for seeking views of stakeholders.
e-commerce:
●
e-commerce is a business model “enables a
firm or individual to conduct business
over an electronic network, typically the Internet.”
●
The consumer and seller or service
provider interaction gets better and efficient.
e-commerce
business in India:
●
e-commerce can be carried out for both wholesale trade or for retail trade (sale
towards final consumption).
●
It can be either Business to Business
(B2B) trading or Business to Consumers (B2C) trading.
●
There is no restriction on conducting e-commerce perse in India. However,
certain restrictions exist, if e-commerce is being done by companies receiving
FDI.
●
In India, 100% FDI under automatic route has been allowed in Business to
Business e-commerce since 2000.
●
A distinction is made between single brand
retail (selling products of a single brand) and multi-brand retail with respect
to permission for FDI and e-commerce.
Need
for new e-commerce policy:
●
There is no commonly accepted definition of e-commerce. Further, there is inadequate data on the trade of digital
products. Both these shortcomings require effective policy making in the
country.
●
The e-commerce market is expected to reach
US$ 200 billion by 2026. Thus there
is a need for clearly laid-down rules for electronic commerce in the country.
●
e-commerce is currently regulated by a multiplicity of government departments
such as IT Department, industrial policy, revenue, and RBI.
●
Hence, a national e-commerce policy would
consolidate the various norms and regulations to cover all online retailers.
●
With the increasing online frauds, there
is a need to strengthen the regulatory regime for protecting the consumer in
the context of e-commerce.
Provisions
of Draft e-commerce policy:
●
A common definition of electronic commerce
for the purposes of domestic policy-making
and international negotiations would be adopted.
●
It proposes a single legislation to address all aspects of the digital economy
and a single regulator for issues related to FDI implementation and consumer
protection.
●
It mandates localisation of data in India. The draft also says the government
will have access to data stored in India for national security and public
policy objectives.
●
The draft policy proposes 49% FDI under the inventory model for
Indian-owned and Indian-controlled firms to sell locally-produced goods on
their online platforms.
●
All active e-commerce portals in India
will have to register with e-Central
Consumer Protection Authority (CCPA). CCPA shall act as a nodal agency for
intra-government coordination, checking frauds within the industry, formulating
regulations and more.
●
On the matter of discounts, the draft
policy suggests a period for every
discount and offer, beyond which no e-commerce portal can be allowed to
provide discounts.
●
It recommends Centralized registration instead of local registration of
e-commerce companies.
Issues
in e-commerce policy:
●
Due to mandatory supervision of
Competition Commission of India on Merger and Acquisition and regulation on
discounts have led to apprehensions of return of license raj.
●
Data localisation norms in draft policy
can discourage international firms
to invest in India.
●
The FDI provision restricted to Indian
firms may influence the much needed FDI in general and e-commerce industry in
particular.
●
The policy states that the Indian
government must have access to e-commerce data at all times. This is dangerous
as it allows state surveillance, in
the guise of safeguarding the privacy of Indian citizens.
●
The policy fails to distinguish between
personal and collective data and treats
all data as one whole.
Thus, e-commerce policy
needs a relook. It needs to resolve data issues and also need to relook at
regulatory provisions. Discount regulation can impact the sector and overall
growth of the Indian economy.