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Draft e-commerce policy: Govt aims to check deep discounts, may ask online retailers to store data in India

The draft recommendations were prepared by several stakeholders, including private sector and government officials from different departments such as commerce, industry, IT and electronics.

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As the government plans to regulate the e-commerce industry, heavy discounts offered by shopping portals may soon become a thing of the past. According to a draft e-commerce policy, the government is contemplating to regulate “deep discounting” offered by e-commerce platforms like Amazon and Flipkart, a report said today. 

The draft shared with stakeholders on Monday for consultations proposes a legislation to control the discounts, offers consumer protection and grievance redressal and covers ownership, FDI, storage of data, mergers and acquisitions, and also offers protection to micro, small and medium enterprises.

Besides e-commerce platforms like Amazon and Flipkart, the policy also covers food delivery sites, online service aggregators offering services and financial products.

The draft recommendations were prepared by several stakeholders, including private sector and government officials from different departments such as commerce, industry, IT and electronics.

These suggestions were discussed by a high-level think tank headed by Commerce Minister Suresh Prabhu at the meeting held in the national capital on Monday.

The think tank would now work out the final draft national policy framework for e-commerce sector based on these recommendations, which would be placed in public domain for further comments.

In the meeting, a level-playing field was suggested for domestic players by ensuring that foreign websites, involved in e-commerce transactions from India also follow domestic rules.

Briefing reporters about the meeting on Monday, OSD Anup Wadhawan, the new commerce secretary, said that the recommendations which were discussed are very comprehensive in nature and covers each aspect of e-commerce such as data flows, consumer protection, grievance redressal, logistics and server localisation.

"From today's meeting, a set of recommendations has emerged for further necessary action by the government for formulating e-commerce policy for the country," he said.

When asked about the suggestions which came up in the meeting, he said issues such as regulator for the sector, consumer data protection, data localisation and competition were discussed.

"Competition laws in terms of fairness in the market place, in terms of avoiding predatory pricing...Policy will uphold some underlying competition principles," he said adding several recommendations were discussed on consumer data protection.

The report of Justice B N Srikrishna committee on data protection has also come out, Wadhawan said adding data localisation issues were deliberated upon as "data provisions has to balance the interest of promoting business with security and privacy concerns".

There are some recommendations related to FDI in the sector and "one is that implementation and enforcement of the current policy," he said.

Now the government would take a view on these recommendations as in how to make them in operation efficiently.

He said that there is no timeline for release of the final policy, but "we cannot afford to have vacuum in the e-commerce space," he added.

Recommendations

The initial draft policy also suggests that all e-commerce companies should store user data exclusively in India in view of security and privacy concerns.  

Data that would be required to be stored exclusively in India includes "community data collected by IoT (Internet of Things) devices in public space; and data generated by users in India from various sources, including e-commerce platforms, social media, search engines etc", according to the initial draft.

The draft also talks about government having access to data stored in India for national security and public policy objectives.

It was suggested that the government should set up a separate wing in the Directorate of Enforcement to handle complaints related to implementation of guidelines related to foreign direct investment in the e-commerce sector.

Bulk purchase of branded goods, especially mobile phones, which lead to price distortions in market place may be banned, the initial draft stated.

On competition issues, it suggested that the Competition Commission should consider amending the threshold limit to examine potentially competition distorting mergers and acquisitions.

Traders welcome move

Commenting on the initiative, the Confederation of All India Traders (CAIT) said they are demanding a policy and a regulator for the sector.

CAIT said that the draft speaks about adoption of RuPay cards as payment technology.

"Think tank should address a national framework on e-commerce for a robust internal reform," Praveen Khandelwal, secretary general, The Confederation of All India Traders (CAIT), was quoted as saying in a release.

He said key elements of such an approach comprise acknowledging the cross-border nature of data economies, being mindful of single point of failure network risks and the need for robust standardisation.

CAIT had been demanding a policy and a regulator for the e-commerce sector since the past two years.

A Snapdeal spokesperson said that the framework for a national policy on electronic commerce represents the collective output of a well-structured discussion on key issues pertaining to the future of the sector.

Representatives from NASSCOM, CII, FIEO, FISME, Electronics and Computer Software Export Promotion Council, Internet and Mobile Association of India, Bharti Enterprises, Reliance Jio Infocom, TCS, Infosys, WIPRO, Mindtree, Tech Mahindra, Ola, Makemytrip, and Urban Clap participated in the meeting. 

(With PTI inputs)

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