|Demand of the question |
Introduction. What is e-commerce?
Body. E-commerce regulation and need of e-commerce policy. Features and issues of draft e-commerce policy.
Conclusion. Way forward.
E-Commerce is a business model “enables a firm/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 per se in India. However, certain restrictions exist, if e-commerce is being done by companies receiving FDI.
- In India, 100% FDI under automatic route is 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$ 64 billion by 2020 and US$ 200 billion by 2026 from US$ 38.5 billion as of 2017. Thus there is a need for clearly laid-down rules for electronic commerce in the country.
- E- commerce is currently regulated by 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
Main provisions 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 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 the needed FDI in general and e commerce industry in particular.
- The policy state that the Indian government must have access to e-commerce data at all times. This is a 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 need a relook. It need to resolve data issue and also need to relook at regulatory provisions. Discounts regulation can impact the sector and overall growth of Indian economy.