Economy

US India Strategic Partnership Forum red flags proposed e-commerce policy

Forum Gandhi Mumbai | Updated on July 21, 2021

‘It will create hurdles to ease of doing business in India’

The US India Strategic Partnership Forum (USISPF), which has Deloitte’s Global CEO Puneet Renjen, Adobe’s CEO Shantanu Narayan and former Cisco chief John Chambers on its board, has expressed concerns over the proposed amendments to the e-commerce rules, stating that it will create hurdles to the “ease of doing business” in India.

“A disabling regulatory framework could significantly impede the growth of the sector. This is the context that should be considered while bringing in any changes to the rules governing this rapidly evolving sector,” the USISPF stated in its 11-page submission to the Ministry of Consumer Affairs.

The not-for-profit body urged the authorities for a “serious consideration” of the growth potential of the e-commerce industry, as well as its contribution to the Indian economy during the pandemic. It also pointed out that the e-commerce industry has been a critical aspect to generate foreign investment in the sector. This, according to the institution, is a “direct result of a light-touch regulation”.

‘Rules are confusing’

On the proposal to broaden the definition of e-commerce, it said that the rules are extremely vast, confusing and lead to additional compliances. “This is problematic and fails to take into consideration that not all marketplaces are alike and may not share similar relationships with buyers and sellers, negating the need for or effectiveness of prescriptive measures,” said the USISPF.

On the issue of mandated registration of all e-commerce entities, the industry body pointed out that it is a hurdle to the “ease of doing business”. Thus, it recommended that the registration requirement should be deleted, since the existing rules already require the e-commerce platform to provide comprehensive disclosures.

“Several new prohibitions on e-commerce entities give rise to the concern that the Proposed Amendments create a discriminatory regulatory environment, where obligations are imposed on digital platforms that do not apply to their brick-and-mortar counterparts,” it said.

There are several examples: first, marketplaces now have to index products and sellers by country of origin, build search functionalities, employ experts to assess all products in the inventory of their sellers (not even their own inventory). To impose a similar obligation on a mall owner, for example, might appear highly incongruous, said the USISPF.

Published on July 21, 2021

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