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In a proposed tightening of regulations for foreign investors, the draft e-commerce policy floated by the Centre has suggested that all e-commerce websites should have a registered business entity in India and all product shipments from overseas must be channelised through the Customs.
The draft policy, put up by the Department for Promotion of Investments and Internal Trade on its website on Saturday, is also categorical that FDI should be encouraged only in the marketplace model.
Additionally, it has emphasised the need to restrict cross-border data flow, proposed steps to reduce operational costs for small enterprises and start-ups, suggested a number of anti-counterfeit measures, and placed an interim ban on all ‘gifts’ shipped to India through the e-commerce route, with the exception of life-saving drugs.
Large e-commerce retailers with foreign investments, including Amazon and Flipkart, have said they are examining the details of the draft proposal and will submit their inputs to the Centre.
But home-grown e-tailer Snapdeal welcomed the proposals. “The draft policy’s categorical rejection of the inventory-based e-commerce model must be followed by effective implementation of FDI norms to ensure marketplaces do not own or control inventory, directly or indirectly,” said a Snapdeal spokesperson.
Better tracking of imports
The draft policy provides for integrating the systems of Customs, the RBI and India Post to improve tracking of imports through the e-commerce route.
“All e-commerce websites and applications available for downloading in India must have a registered business entity in India as the importer on record or the entity through which all sales in India are transacted,” it said.
The policy prescribed a number of anti-counterfeit measures. “E-commerce entities are required to publicly share all relevant details of sellers who make their products available on the websites/platforms of these entities.
“All the sellers/retailers are required to furnish an undertaking of genuineness of products to the platforms and the same must be made accessible to consumers by the platforms,” it said.
The platforms will also be required to seek authorisation from trademark owners before listing high-value goods, cosmetics or goods impacting public health.
The draft policy proposes conditions on business entities which have access to sensitive data of Indian users stored abroad. “Sharing of such data with third party entities, even with customer consent, is barred... Violation of conditions of this policy will be made accountable to prescribed consequences,” it warns.
Fillip for MSMEs
To lower the transaction cost for MSMEs and start-ups, the policy proposes the removal of application fee for claiming export benefits and also avoiding other paperwork.
The draft policy will be given a final shape after taking into consideration the comments of the stakeholders.
Key terms and conditions
* All players must have registered business entities in India
* FDI to be allowed only in marketplace model
* Several anti-counterfeit measures to be introduced
* Ban on all ‘gifts’ shipped to India via e-commerce route
* No Mixed-Media Items
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