E-commerce policy may be delayed as Ministry initiates fresh parleys

Amiti Sen | | Updated on: Dec 06, 2021

Suresh Prabhu | Photo Credit: M_VEDHAN

Stakeholder talks may include foreign players for the first time

The much awaited e-commerce policy being framed by the Commerce Ministry is likely to get delayed as the fresh round of stakeholder consultations, prescribed by Commerce Minister Suresh Prabhu, could be more extensive than before.

“There is a possibility that more views could be sought this time including those of foreign players such as Amazon and Walmart who were not consulted earlier. The whole process of consultation and incorporation of fresh views could take several weeks. However, there is no clarity yet on what format the consultations would follow,” an industry source close to the development told BusinessLine .

Prabhu, on Saturday, announced his plan to carry another round of stakeholder consultations on the proposed draft of the e-commerce policy submitted by the taskforce on e-commerce late last month.

The official tweet of the Commerce Ministry said the fresh consultation had been proposed to address “few concerns” on the taskforce proposals.

“While Commerce Ministry officials had incorporated changes in the task force’s proposals based on the last meeting of the think-tank on e-commerce on July 30 and were ready to put up the draft for public comments on its Web-site, it will have to be put off now,” the industry source added.

Foreign players

Concerns on the proposed policy have been raised by foreign players such as Amazon and Walmart, among others, who feel that the e-commerce rules are tilted in favour of domestic e-commerce companies.

“Officials from some of the foreign retail giants have already had meetings with the Commerce Ministry protesting against some of the proposals,” the official said.

Market value

India’s e-commerce market, currently valued at about $27 billion, is one of the fastest growing in the world.

The government is working on a comprehensive e-commerce policy as it faces intense pressure to get into negotiations to liberalise the sector at various bilateral and regional forums and the World Trade Organisation. In the absence of a proper domestic policy it is difficult to take a well-considered stand on the matter.

The suggestion of the taskforce on e-commerce of introducing a sunset clause for offering deep discounts to customers has made big players unhappy.

It also proposed that the restrictions on e-commerce marketplace to not directly or indirectly influence the sale price of goods and services, be extended to group companies of the e-commerce marketplace.

Another suggestion by the task force, which aims to promote sale of domestically-produced goods by allowing limited inventory-based B2C model, through platforms controlled by Indian management, but allows foreign equity up to 49 per cent has been criticised by domestic companies which say that this contradicts the government’s stated intent to strengthen Press Note 3, which bars any foreign direct investment in inventory-based online retail.

IT companies

Some IT companies with presence in foreign countries have also raised concerns on the 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.

Published on August 14, 2018
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