The commerce and industry ministry’s proposed national e-commerce policy is entering its final stages, signaling a significant stride towards regulating the dynamic electronic business landscape. As the Indian e-commerce sector surges forward with grocery and fashion/apparel as major drivers, the industry’s estimated value of $99 billion in 2024 is poised to escalate to an impressive $300 billion by 2030. With this promising growth trajectory, the government acknowledges the need for a robust regulatory framework to safeguard consumers, facilitate fair business practices, and ensure secure data management.
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E-commerce is becoming a pivotal force propelling India’s economic progress. The envisioned policy seeks to address the multifaceted challenges associated with the evolving electronic business realm. In 2019, a draft National E-Commerce policy was unveiled, inviting public input. The policy’s implications rippled across borders, eliciting feedback from foreign governments, including concerns from the US Government about its impact on American businesses. In the backdrop of these inputs, the Department for Promotion of Industry and Internal Trade (DPIIT) engaged with e-commerce entities and domestic traders’ representatives in August 2023, resulting in a consensus among stakeholders.
Among the policy’s strengths is its emphasis on transparent information provision. E-commerce platforms are mandated to provide comprehensive product details, return/exchange policies, payment methods, and grievance resolution mechanisms. This commitment to transparent information enhances consumer confidence and supports a healthy e-commerce environment. The policy also demands platforms to disclose seller information, enabling buyers to make informed decisions beyond the platform.
Crucially, platforms are prohibited from exploiting data to gain undue advantage or exhibit preferential treatment towards certain sellers. This safeguard ensures equitable treatment and well-being of sellers, fostering a level playing field.
However, the policy’s aspirations have stirred debates. One contentious point is the “fallback-liability” clause, which holds platforms responsible for third-party seller mis-selling. This provision appears at odds with Finance Ministry’s FDI rules that bar platforms from managing their inventory explicitly. Moreover, the policy revokes the immunity granted to marketplaces under the IT Act, raising questions about regulatory coherence.
The Ministry of Corporate Affairs questions the necessity of competitive position abuse rules, as the Competition Commission of India already addresses such concerns. The policy’s prohibition of related parties from commercial activities on platforms also faces scrutiny, as the definition of “related party” and its implications warrant careful deliberation.
The proposed national e-commerce policy reflects India’s commitment to harnessing the potential of the digital economy while establishing safeguards for all stakeholders. Striking a delicate balance between regulation and growth, the policy aims to foster innovation, competition, and consumer trust in the evolving e-commerce landscape.
