E-commerce companies asked to submit their concerns on draft policy

Last Updated at: Dec 03, 2020
E-commerce companies asked to submit their concerns on draft policy
E-commerce companies asked to submit their concerns on draft policy

There is a huge space for the E-commerce industry to grow in the Indian market. With over $600 billion worth in the retail market, India has only 5% of E-commerce companies in it. Even though India’s smartphone usage has rocketed high these past few years, the habit of purchasing online hasn’t increased dramatically among the citizens. There might be different reasons for the delayed adaption of online shopping but E-commerce can be penetrated better with much better policies and reforms offered to the operators.

E-Commerce Draft Policy

The 42-page e-commerce draft policy was released in February 2019 and addresses issues of the e-commerce ecosystem – data, infrastructure, marketplace, regulatory issues, digital economy, and export promotion. It stated the creation of a regulatory framework for cross border data flow and data collection through various channels like social media, e-commerce platforms, and search engines. The policy stated that any business that collects sensitive data from users in India and stores them abroad shall not make the data available for any business and foreign government without the consent of the customer and Indian authorities.

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Submission of Concerns over E-commerce Policy Draft

Following the government’s release of draft e-commerce policy, which proposes setting up of a technological framework for regulating cross-border data flow, the government has asked the retailers to submit their concerns on the draft within 10 days.

The current Commerce and Industry Minister met on 17 June 2019 with many industry stakeholders and government officials from RBI and the Ministry of External Affairs. The meeting was held in four cohorts and the discussion was about opportunities for India in the digital economy, e-commerce’s value addition to GDP, data flow concerning privacy, security, safety, ownership and sharing of data and cross border flow of data.

According to media reports, the ministry in its statement said that e-commerce industry representatives flagged their concerns about the draft and felt it was not consultative. It further added that the Commerce Minister assured that every concern would be addressed and requested the representatives to send their concerns in writing to the Department for Promotion of Industry and Internal Trade (DPIIT) within 10 days.

Also, the companies raised their concern over data storage and data processing guidelines. To which the Ministry of Electronics and Information assured to consider their concerns while formulating the Data Protection Bill.

E-commerce Policy 2020

The government is expected to bring an updated E-commerce Policy in 2020. Though the timeline hasn’t been confirmed yet, everyone is looking forward to the newer policies. 

The policy draft 2019 disallows collection and storage of public’s sensitive data locally but to be stored abroad when shared with any third party. This is imposed even when the customer has shared their consent with sharing and storing the data locally.

E-commerce regulations include several domains like retail, information technology, consumers, payments etc. Hence many believe that localizing the customer data will help a lot of Indian startups to bring up more local innovation. The Department for Promotion of Industry and Internal Trade (DPIIT) also believes in the localization of data for the betterment of innovation and accessibility. These thoughts were shared after the policy draft 2019 revelation.

Many ministries are trying to manage these circumstances. They are working on bringing in their own E-commerce rules, especially the IT and the consumer affairs ministry. The IT Ministry is working on non-personal data regulations. The consumer affairs ministry is working on the draft guidelines for customer protection. These will be added to DPIIT national E-commerce policy and will be unveiled by DPIIT itself.

The government has now mentioned that the updated policy might only be a reiteration of existing rules. The E-commerce industry must wait for further indications to have a clear cut understanding of the revised policy draft.

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A lawyer with 14 years' experience, Vikram has worked with several well-known corporate law firms before joining Vakilsearch.