The draft e-commerce policy circulated on July 31 that puts restrictions on pricing and inventory holding will do more harm than good, say industry players.

Rajesh Nahar, co-founder, cbazaar, said: “There should not be pressure on e-commerce players on the pricing, and inventory holding is necessary for the e-commerce ecosystem to thrive.”

“Restrictions on pricing policy will affect the normal retailers as well,” he added.

Nahar said shopping now is not what it was before as consumer expectations change. For instance, current consumers want the convenience of online with the experience of the physical store. “So traditional players cannot do business like how they are doing now. They need to evolve. For that, pricing and inventory holding are necessary and any restrictions on them will be a detriment,” he added.

Policy challenges

Arun Gupta, founder, MoMagic Technologies, agrees. “With e-commerce, we are not only enjoying deep discounts, but also convenience and variety,” he said.

For online retailers, it has cost advantage since they were able to optimise their supply chain through bulk inventory.

But these are not the only challenges, said Supratim Chakraborty, associate partner, Khaitan & Co. “While the policy is commendable, it cuts across various regulators and domains making compliance very difficult,” he felt.

For instance, the proposed data privacy policy mandates how and what data can be stored. The policy states that while some data can be sent outside, other sensitive and critical data should be stored within the country.

The proposed e-commerce policy which also mandates data locations, states that all data generated while accessing e-commerce sites have to be stored within India in two years.

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