The Department For Promotion of Industry and Internal Trade (DPIIT) has made public its new draft National e-Commerce Policy. The policy outlines strategies for addressing critical issues within the e-commerce sector such as consumer protection, data privacy, and the creation of a level playing field.
The Need for the Policy
In India, data consumption has seen a massive surge from 0.26 GB per person on a monthly basis in 2014 to a staggering 4GB by the end of 2017. As internet utilization escalates, so does the generation of data, necessitating the prioritization of data privacy and consumer protection. Moreover, this increase in usage calls for the regulation of data flow to leverage it for the benefit of domestic economy.
For genuine competition that encourages entrepreneurship and innovation, a regulatory environment is needed. The policy aims at addressing challenges posed by e-commerce in terms of legalities, revenue-base erosion, privacy concerns, anti-competitive behavior, and consumer protection without curbing the sector’s growth.
Key Issues Addressed
The policy emphasizes data Individual Rights, asserting that an individual owns the rights to their data and must provide express consent for its use. It also stresses on Indian control over data, suggesting restrictions on cross-border data flow. Consequently, the policy supports data localization and stipulates that data generated within India must be stored within the country itself.
Non-compliant e-Commerce app/website will have access denied in India. Further, all e-Commerce websites and apps available for download in India should have a registered business entity within the country.
Infrastructure Development and Foreign Direct Investment
The policy focuses on developing a robust digital economy through physical infrastructure development. Steps were suggested for building data storage capacity in India, and companies would be incentivized to establish local data storage facilities.
In the e-commerce marketplaces, FDI would only be permitted in the marketplace model and not the inventory-based one. This is consistent with the e-Commerce guidelines issued by the government previously.
Creating A Level Playing Field
The policy aims to protect the interests of domestic manufacturers and MSMEs, and strives to provide them with a level ground in online retail. To curb Chinese e-commerce exports through the Gifting route, the policy suggests banning all parcels except life-saving drugs. It also calls on sellers to provide a guarantee of authenticity for their products.
Facts about E-commerce in India
| 2014 | 2017 | FDI |
|---|---|---|
| 0.26 GB per person (average monthly data consumption) | Over 4GB per person (average monthly data consumption) | Allowed only in marketplace model |
Stimulating the Domestic Digital Economy
To meet national goals like consumer protection, creating domestic industrial standards for smart devices and IoT devices has been suggested. Online custom clearances will eliminate manual processes, thus facilitating ease of doing business. With the government’s continuous focus on the Digital India initiatives, the e-commerce sector’s development will show a steady rise.
Export Promotion
e-Commerce startups might gain ‘infant industry’ status raising the limit for courier shipments from Rs 25,000 to boost e-commerce export. To bolster exports, the policy recommends lowering transport costs, paperwork reduction, and minimizing port and airport delays. The integration of Customs, RBI, and India Post will enhance import tracking through e-Commerce.
