Electronic commerce is an entirely newfangled way of doing business and it is a new archetype. India countersigned an e-commerce boom in the twenty first century that as transfigured the way many of us take commercial transactions. Undoubtedly its fundamentals were laid in the 1990s when chief policy changes led to the occurrence of the circumstances indispensable for such a turn of happenings.

Now with an intention of establishing a legal and technological outline for limits for cross border data flow and handling of sensitive data by the both domestic and overseas business entities, the Department of Industry and Internal Trade of India has released the draft national e-commerce policy in February 2019. Various crucial concerns incorporated in the policy are control over data, development of infrastructure, economic marketplaces, regulatory issues, formation of E-commerce courts, stimulating domestic digital economy, export promotion and levy of customs duty on electronic transmissions. According to the officials engaged in the process this draft ecommerce policy has been designed keeping in mind India’s national interest.

Will it hit out or get out?

With an intention of tightening the regulation of the national e-commerce industry the policy has been introduced. But it contains several problematic suggestions. Here is a sincere effort to throw light upon them:

• The policy levies a restriction on how much the organization related to E-commerce platform can sell on a particular portal and prohibits any special treatment to any supplier. This will help less and obstruct many. Cashback offers and privileged packages like Amazon Prime and Flipkart Plus will experience bad days.

• The policy norms will badly hit frontline ecommerce players as they are attracting customers with deep discounts since many years. People who buy goods online will be deprived of deep discounts and numerous selective promotional schemes. The move is disturbing at a time when ecommerce entities are offering jobs and investing huge money in marketplace of India.
• According to the policy an organization in which any ecommerce entity or its group have an equity contribution or its inventory is being controlled by any ecommerce entity or its group companies, cannot sell its merchandises on the platform run by such marketplace entity. For example, Cloudtail which is a joint venture between N.R.Narayana Murthy’s Catamaran Ventures and Amazon, cannot sell on Amazon and favorable terms for warehousing or logistics cannot be given for Cloudtail.

The policy restricts sellers from selling more than 25 per cent of products on an e-commerce stage. This will dishearten many small businesspersons or entrepreneurs who flourish even without brick and mortar functions. In addition, their production and distribution costs will also rise steeply.

• The policy says that all data generated in India should belong to Indians and it is a national asset that the government keeps in faith for its citizens. Thus, the draft policy indirectly allows the government to manage the personal data of citizens. This is directly at odds with the references of the Justice Srikrishna committee and the pronouncement of the Supreme Court relating to right to privacy judgment.
• The policy specifies that data collected in India and stored abroad cannot be made available to anyone outside India and the Indian government must have access to this data at all times. This is a unsafe step and allows the government to nationalize personal data instead of safeguarding it. This will further irritate the United States of America which has upstretched worries over increasing trade barriers in India. The policy has also suggested to forbid all gifts shipped to India through e-commerce avenue.

To conclude, the draft e-commerce policy of India which has been designed to tackle and handle challenges of e-commerce industry in India, seemingly has very little to applaud about. As we are aware earlier draft of the policy by the commerce ministry was decorated recycle bin after e-commerce supermen raised strong oppositions. The problems of e-commerce industry warrant smart solutions rather than ham-fisted or awkward solutions. Therefore, the policy makers have to immediately focus on negative opinions which may take birth in the minds of foreign investors due to faulty policy formation and take power packed action to plug the loopholes. Importantly it is to be hoped that in the context of e-commerce, rule makers will set aside the compulsion of politics and concentrate on the greatest good of the greatest number. This will definitely bring cheer on the faces of many and they will say ‘Oh happy day is here’

• The writer is a tax specialist, author and public speaker based in Margao-Goa

BY SHIVANAND PANDIT,