‘Regulatory framework appears to be coming back’

The proposed e-commerce policy is likely to make it difficult for foreign players to carry on business activities in India.

At present, the approximately $33-billion digital economy is dominated either by foreign players, such as Amazon and Google, or by home-grown companies controlled by foreign investors such as Flipkart, Paytm or Snapdeal.

The industry veterans and analysts BusinessLine spoke to feel the new draft policy is “flawed” in many aspects.

Arvind Singhal, founder and Chairman of retail consultancy firm Technopak said: “While the government’s job is to be a facilitator for any industry to grow, it has no right to interfere in how companies sell their goods. There is no reason to differentiate between companies on basis of ownership.”

He added that curbing discounts is “irrational” as these companies are not publicly-listed, and do not have public money at stake. Hence, it is up to the company on how much money it can spend on discounts.”

Harish HV, former partner at Grant Thornton, said the sector, unlike the IT, has grown without any government support, and too many regulations can kill the sunrise segment. “High regulatory framework that stopped in 1991 is making a comeback, it seems,” he said. Regulations will only make the companies look for loopholes to bypass the laws.

Devangshu Dutta, founder of consultancy firm Third EyeSight, said there is nothing wrong in having policies skewed towards local players as that is the mandate of any elected government.

“I don’t think, the policy is favouring any single company. It is definitely trying to encourage local companies by constituting a single regulator that will also look into anti-competition activities,” said Llyod Mathias, former HP and Motorola executive and a telecom industry veteran.

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