Govt in final stages of formulating National Ecommerce Policy

The final stages of crafting the proposed national ecommerce policy, led by the Commerce and Industry Ministry, are underway. According to a senior government official, there will be no additional draft policy released for input from stakeholders at this point.

During a meeting that happened on August 2, hosted by the Department for Promotion of Industry and Internal Trade (DPIIT), extensive discussions unfolded between representatives from ecommerce companies and a domestic traders' association concerning the proposed policy.

In the meeting, a broad level of consensus emerged among the concerned stakeholders on the proposed policy.

"Now no draft policy will come. That exercise is over now. We are just getting a final sign-off," the official, who did not wish to be named, said, adding there will be a presentation of the proposed policy at the top level of the government.

The official also noted that ecommerce companies must adhere to local regulations regarding data localisation.

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Notably, the ministry had earlier issued two draft national ecommerce policies. The 2019 draft encompassed six main areas within the ecommerce ecosystem, including data handling, infrastructure development, ecommerce marketplaces, regulations, boosting the domestic digital economy, and promoting exports through ecommerce.

This draft talked about topics such as regulations on cross-border data flow, management of sensitive data within the country, tackling counterfeit and prohibited items, reevaluating the exemption of customs duties on digital transmissions, promoting exports through ecommerce, and building local data storage capabilities.

The proposed policy would take into account the interests of multiple stakeholders, encompassing investors, manufacturers, small- and medium-sized enterprises (MSMEs), traders, retailers, startups, and consumers.

The government is concurrently working on establishing consumer protection rules for the ecommerce sector. The objective is to ensure the cohesiveness of the policy and consumer protection regulations.

The ecommerce policy aims to prepare strategies for providing a conducive environment for inclusive and harmonious growth of the ecommerce sector through a streamlined regulatory framework for ease of doing business, adoption of modern technologies, integration of supply chains and enhancement of exports through this medium.

The Confederation of All India Traders (CAIT), representing domestic traders, has repeatedly called for the policy's implementation. They have voiced concerns about foreign online retailers potentially violating foreign direct investment (FDI) norms, urging government intervention against such activities.

Notably, FDI is permitted in the marketplace model of ecommerce, while it's restricted in the inventory-based model. Compliance with FDI regulations falls upon the invested company, with contraventions addressed under the Foreign Exchange Management Act (FEMA).

Regulation of the digital and ecommerce sector in India is still in an evolving state, governed by various acts such as the Information Technology Act, Consumer Protection Act, FDI policies, and the Competition Act.

In parallel, the DPIIT is developing a national retail trade policy. Domestic traders have also expressed the need for a regulatory body to oversee and manage ecommerce trade within the country.