The proposed e-commerce policy drafted by the Commerce Ministry is likely to see a number of changes with the Prime Minister’s Office (PMO) stepping in to take on board concerns raised by sections of the industry, as well as the government.

The PMO, which convened a meeting of senior officials from key Ministries and Departments including Commerce, Industry, Consumer Affairs, IT, Finance and also the NITI Aayog last week, is now likely to keep a keen eye as the Commerce Ministry incorporates changes in the draft, a government official told BusinessLine .

“Many sections in the government, including the IT Ministry, the Consumer Affairs Ministry, the Finance Ministry and also the NITI Aayog, have raised certain objections to some proposals in the first draft. The PMO will have a say on how valid these objections are and the changes that are to be made,” the official said.

NITI Aayog CEO Amitabh Kant said in an interaction with the media last week that the government should not get into the market by looking at micro issues of discounts and pricing. The suggestion made in the draft e-commerce policy, of introducing a sunset clause for offering deep discounts to customers, has also not gone down well with many big players such as Amazon and Flipkart.

“The idea behind checking deep discounts online was to ensure a level playing field for brick-and-mortar companies that may not have enough resources to support such discounts. If there are different views on the matter, one could always discuss it,” another official said.

Measured stance

The PMO is expected to take a measured stance on the issue. While it is keen to attract FDI, it also has to keep the interest of traders in mind, especially as protecting their interest was part of the BJP government’s poll promise in the last elections.

The proposal that restrictions on e-commerce marketplace to not directly or indirectly influence the sale price of goods and services, should be extended to group companies of the e-commerce marketplace, is also a bone of contention for many.

Another controversial suggestion is allowing foreign equity up to 49 per cent in a limited inventory-based B2C model. Although a caveat that the platforms should be controlled by Indian management has also been proposed, the domestic industry has opposed the suggestion on the ground that it contradicts the government’s stated intent to strengthen Press Note 3, which bars any foreign direct investment in inventory-based online retail.

The IT industry, on the other hand, is dealing with complaints from industry bodies which have objected to data localisation proposals which state that the 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 framework must be developed for sharing the data within the country.

“It is very clear that changes have to be brought about in the first draft of the proposed e-commerce policy before it is put up on the web-site for comments from stakeholders. Commerce Minister Suresh Prabhu had suggested another round of stakeholder consultations on the draft before it is put up. One has to see how soon it can be done,” the first official said.

Interestingly, the first draft was made by the taskforce on e-commerce which had representations from several key Ministries and Departments.

“The concerns which remain despite most Ministries having a say in the policy draft is a reflection of how sensitive e-commerce is,” the official said.

Fastest growing market

India’s e-commerce market, currently valued at about $27 billion, is one of the fastest growing in the world. The Commerce Ministry was given the responsibility of framing a comprehensive e-commerce policy as it was facing intense pressure to get into negotiations to liberalise the sector at various bilateral and regional forums and the World Trade Organisation.

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