Suresh Prabhu asks officials to hold another round of consultations on draft e-commerce policy

Commerce and Industry Minister Suresh Prabhu today asked his officials to undertake another round of stakeholder consultations for the draft e-commerce policy as concerns have been raised on some proposals.  The ministry, in a tweet, said that it "had received few concerns regarding the draft e-Commerce Policy following which the minister has directed officials to conduct another round of consultation with stakeholders to address them. The Minister will personally review the draft once it is prepared." 

The initial draft e-commerce policy has suggested several steps to promote the growth of the fast growing sector.  It said online retail firms may have to store user data exclusively in India in view of security and privacy concerns.  It has stated that any group company of an online retailer or marketplace may not be allowed to directly or indirectly influence the price or sale of products and services on its platform, a move that could completely restrict e-tailers from giving deep discounts. 

The draft has also suggested introduction of a pre-set timeframe for offering differential pricing or deep discounts by e-commerce players to customers.  Further, the draft recommended permitting 49 per cent foreign direct investment (FDI) in inventory-based business-to-customer e-commerce model. Currently, FDI in such businesses is prohibited and it is allowed only in the marketplace model. 

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Besides, it has talked about adopting a common definition of e-commerce for the purpose of domestic policy making and international negotiations as currently there is no commonly accepted definition.  In the context of international trade negotiations, policy space for granting preferential treatment and imposing customs duties on e-transmission to digital items created in India would be retained. 

Further, it recommended steps for increasing use of RuPay. The steps could include identifying deficiencies in infrastructure, providing budget, branding, and addressing quantitative deficiencies in service for wider use of RuPay cards. However, certain online firms have welcomed the draft policy. Travel e-commerce firm Travel Unravel Holidays has hailed the move to form a single regulator for the sector.

Saurabh Sharma, Director, Travel Unravel Holidays said, "This move will organise the entire travel space, which eventually will help everyone in the chain especially the end consumer. The single e-commerce regulator will ensure one umbrella that will drastically reduce the multiplicity of compliance and authorities to deal with, offering seamless business ecosystem." 

Additionally, it will prevent monopolistic tendencies of big players to usurp the market and infuse competitiveness and fair play in the travel business, he said.