The draft e-commerce policy, which will define e-commerce, strengthen foreign direct investment laws in the sector, address regulatory and competition issues, and take care of consumer interests, including data protection and privacy, has been given to the government by the task force entrusted with the task.
India’s e-commerce market, currently valued at about $ 27 billion, is one of the fastest growing in the world and has players including Flipkart-Walmart, Paytm (which is backed by Alibaba group and Softbank), Amazon, Shopclues (Tiger Global) and Snapdeal (SoftBank). The draft policy also covers food delivery sites, online service aggregators offering services and financial products.
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“The task force has given its recommendations. The government will continue to hold discussions based on it,” said Anup Wadhawan, Special Secretary, Department of Commerce, at a media interaction.
- Heavy discounts offered by shopping portals may be a thing of the past, as “deep discounting” offered by e-commerce platforms like Amazon and Flipkart, may be curbed.
- Data storage in India: As per the task force’s recommendation, data generated by users in India from various sources, including e-commerce platforms, social media and search engines, should be stored exclusively in India, and a suitable framework needs to be developed for sharing the data within the country. This will impact companies like Amazon, Facebook and its messaging service WhatsApp.
- Mandates that home-grown card network RuPay be included as a payment option for online transactions. The company owned by a group of banks competes with global payment firms like Visa, MasterCard and American Express.
- Boost participation of micro, small and medium enterprises in online retail and proposed banning the bulk purchase of branded goods, such as mobile phones, by “related party sellers which lead to price distortions in a market”. Currently, sellers like Cloudtail, a joint-venture between Amazon’s India unit and Infosys co-founder N.R. Narayana Murthy, make up the bulk of the sales on Amazon’s online marketplace.
- A level-playing field for domestic players by ensuring that foreign websites, involved in e-commerce transactions from India also follow domestic rules.
- It will have an online grievance redressal mechanism.
- The draft recommends tightening the scrutiny of mergers in the e-commerce sector so that even small deals that potentially distort competition are compulsorily examined by the country’s anti-trust regulator to ensure fairness in the market place and prevent predatory pricing.