The National Ecommerce Policy - Bane or Boon?

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Many of the industry giants, independent policymakers and associations have however expressed concerns over it because they feel that some areas are grey and ambiguous and seem to be more of an internet policy rather than an ecommerce policy.

The ecommerce business in India is worth more than $38.5 billion and growing. It is but natural for the Government to roll out a National ecommerce Policy and issue necessary guidance to the partners. It covers all the concerns of ecommerce including consumer protection, intellectual property rights protection, and data which is an integral component of ecommerce. It is exclusive as well as inclusive in nature. 

The Government has shown great enthusiasm in drafting this policy and thereby boosted many of its pet projects at the same time ensuring that it is in sync with the industrial policy of the country because the Indian economy originally is a brick and mortar economy and ecommerce, though on an upward graph, is a recent trend.

Many of the industry giants, independent policymakers and associations have however expressed concerns over it because they feel that some areas are grey and ambiguous and seem to be more of an internet policy rather than an ecommerce policy. No doubt the Government has kept in mind data protection, counterfeit prevention, tracking systems for imports and exports, given ‘infrastructure’ status to what is known as data centres. Besides, the government’s very own schemes as Start-up India, Digital India, Make in India and Skill India have found a place here since they rely heavily on ecommerce.

Critics claim that the following areas could have been less ambiguous.

  • This policy somehow focusses primarily on data protection despite there being a separate bill for the same. Stakeholders feel that this is not necessary and has led to unavoidable confusion. There is, in fact, no clarity in the definition of data whether it is national data, community data or individual data. The policy has no clarity on data because although it categorically mentions that “individual consumer/ user who generates data retains ownership rights over his/her data and that the processing of data by corporations without explicit consent must be dealt with sternly” and there is no requirement of permission to share the data with a third party. Therefore the objectives here are rather unclear. 
  • The definition of ecommerce used in this policy is rather broad. It is confusing because it is not referred to as a subset of the digital economy as is done internationally but used simultaneously with it. There are mentions of industries that need not fall under ecommerce and separating the digital economy from ecommerce will help to lay down clear cut guidelines.
  • Where consumer protection is concerned this policy lays down stringent rules but the implementation of penalties lies with other authorities. Ambiguity again and it makes life difficult for the consumer because they are liable if the seller is not GST compliant preventing them from purchasing whereas in reality the platform itself should be made responsible to see that the sellers are GST compliant.
  • The policy does not clarify the role of ecommerce platforms and this makes it difficult for India to become a global leader in ecommerce. Trademark is an issue here because each time a trademarked product goes up on the platform the platform/Intermediary is obliged to inform the owner requiring a massive amount of investment in human resources or technology. So the overall costs increase leading to the increased cost of goods. 

This policy can be either a boon or a bane because it includes a whole lot of stakeholders as MSMEs, Start-ups, Payment systems, Sellers, Advertisers, Logistic providers, IT and the like.

  1. As laid down by the policy every ecommerce business operating in India has to register itself here. This will ensure that they pay the taxes of the land and the Government can deal with such companies better. But this can inhibit FDI and be an obstacle to the easy entry into Indian markets.
  2. There is mention of a supervisory body called Standing Group of Secretaries on ecommerce but no mention regarding its formation or functioning. The policy thus seems to be rather vague and its provisions are not watertight at all. Hence, it is not clear how this SGoS can implement the legislation required for the ecommerce regulations to be enforced.
  3. The creation of technology centres cannot be effective unless the judiciary and state are included in this.

So we can safely conclude that as of now the Policy is only giving us a direction and cannot be enforced or implemented definitively at the moment.

For now, the Draft Policy is only a direction; it is not an enforceable document. This must change for it to be able to meet its objectives. India can and definitely needs to be a global leader in the ecommerce sector but this policy is not helping the purpose. India can become a Global Influencer in the field only when the National ecommerce Policy is implemented properly with the required amendments. Investments from companies like Amazon and Walmart are quite good and it is obvious that they, like many others, consider India to be a high-potential ecommerce market. All that is required now are changes in the National ecommerce policy for ecommerce in India to mark its own ground.