Draft E-Commerce Policy Has Left Out Key Areas Which May Create Issues: CAIT

Traders' body CAIT Saturday said the draft national e-commerce policy released by the government has left out some areas which may create new problems for the sector.

"The draft of e-commerce policy looks to be innovative and good but at the same time several things have been left out," CAIT Secretary General Praveen Khandelwal said.

According to him, the e-commerce policy should provide substantial platform for business and the draft seems to be silent on domestic players in the sector which is undesirable, and they should also be brought under the policy.

The government Saturday released the draft national e-commerce policy proposing setting up a legal and technological framework for restrictions on cross-border data flow and also laid out conditions for businesses regarding collection or processing of sensitive data locally and storing it abroad.

The draft policy said the framework would be created to provide the basis for imposing restrictions on cross-border data flow from specified sources including data collected by IoT devices installed in public space, and data generated by users in India by various sources, including e-commerce platforms, social media, search engines.

The 42-page draft addresses six broad issues of the e-commerce ecosystem -- data, infrastructure development, e-commerce marketplaces, regulatory issues, stimulating domestic digital economy and export promotion through e-commerce.

A business entity that collects or processes any sensitive data in India and stores it abroad, shall be required to adhere to the certain conditions, according to the policy draft.

The policy laid out strategies to protect misuse of data while maintaining the spirit of existing regulations, it said adding that e-commerce warrants a framework which extends across segments, due to the cross-cutting nature of issues.

On e-commerce marketplace businesses, it said the policy aims to invite and encourage foreign direct investment (FDI) in the marketplace model "alone", which is being carried out by companies like Flipkart and Amazon.

Online marketplaces should not adopt business models or strategies which are discriminatory and which favour one or few sellers/traders operating on their platforms over others, the draft clarifies.

Besides, all e-commerce sites/apps available for download in India must have a registered business entity in India as the importer on record or as the entity through which all sales in India are transacted.

This is the second draft being prepared by the department for promotion of industry and internal (DPIIT) as several concerns were raised over the first draft of the department of commerce.