India’s 1st National Policy On E-commerce Drafted: Top 7 Highlights

Govt. of India has just released the first draft of India’s national policy on e-commerce. This is a set of policies and rules, which aim to provide a framework for India’s e-commerce industry and for all players involved in this industry.

Here are the 7 major highlights which we extracted from the draft policy, which are subjected to cabinet approval:

Sanctity Of User Data

The draft on India’s e-commerce policy strongly pitches for protection of user data, which are stored with e-commerce firms in any form.

As per the draft presented, e-commerce firms would be mandated to store all data pertaining to Indians within India itself.

The issue of data protection has gathered steam after the Cambridge scandal and recently TRAI had informed all digital companies, telecom operators that the user data only belongs to the users, and no one else.

The draft policy shall mandate all e-commerce portals to describe and explain the data collection policy in a “simplified and an easily understandable form on their websites.”

Restrictions On Online Marketplaces

The draft presented by the Indian Govt. on e-commerce portals mentions some new regulations for the digital marketplaces, which have proved to be the main medium of online shopping.

For instance, e-commerce marketplaces would be prohibited from influencing the prices of goods and services, and most probably, the intention behind this is to make the prices compatible with offline traders.

The same applies to group companies as well, operating in the commerce sector.

India-focussed E-commerce Guidelines

To support ‘Make in India’, the draft policy limits inventory based B2C e-commerce in India for products made outside India. This means that domestically produced goods can be stored in inventory, but imported goods cannot (after a limit)

This means that Govt. is pushing for an ‘Indian-centric’ e-commerce model, wherein local manufacturers and farmers are given more preference.

More Focus On Customer Issues, Complaints

The draft policy has an entire section devoted to customer complaints and issues while doing online shopping.

As per the proposals, a separate wing within Directorate of Enforcement can be allocated for handling e-commerce complaints and issues from customers. We have already reported that e-commerce complaints have increased by 1500%.

National Consumer Helpline has already stated that e-commerce customers are the one who complains the most.

Registration of All Ecommerce Portals

If the draft policies are approved, then all active e-commerce portals in India will have to register with eCentral Consumer Protection Authority (CCPA), which will be soon established to monitor the industry.

CCPA shall act as a nodal agency for intra-government coordination, checking frauds within the industry, formulating regulations and more.

More Power To The Founders

The draft policy seeks to give more control and more power to the founders of the eCommerce business, rather than the investors. As per some analysts, this has been done because most of the biggest e-commerce portals in India are funded by foreign investors.

The draft policy defines an Indian e-commerce portal as the one where: FDI doesn’t exceed more than 49%; the founders are Indians; the platform is controlled by an Indian management.

Regulations On Discounts

On the matter of discounts, the draft policy suggests a ‘sunset period’ for every discount and offer, beyond which no e-commerce portal can be allowed to provide discounts.

We will keep you updated, as we receive more information on the e-commerce policy, drafted by the Govt.