National E-commerce Policy: Everything you need to know

E-commerce has transformed the way business is done in India. In a country like India with over 25000 pin codes, the segment has emerged as the preferred way of shopping for the citizens, compelling many businesses working in the traditional or bricks-and-mortar model to make a shift.  

The E-commerce sector in India has shown exceptional growth and evolved many folds over the last few years, and it is expected to continue its growth trajectory to become a market of US$ 200 billion by 2026 from US$ 38.5 billion as of 2017.

The rapid growth and evolution of the segment have brought forth some major concerns and challenges, such as:

  • maintaining a level playing field,
  • influence of monopolistic tendencies and therein
  • a need to maintain symmetric information to exert free choice
  • loss of business for the small retail trader segment.

With the rapid evolution of the segment, an efficient and systematic way of governance became the need of the hour, which was lagging in the previous method.

Earlier, in India, the sector due to its cross-cutting nature was governed by different law and regulations like Income Tax Act, 1961, Consumer Protection Act, 2019, Information Technology Act, 2000, Foreign Exchange Management Act, 2000, Competition Act, 2002, Payment and Settlement Systems Act 2007, Companies Act, 2013 and laws related to Goods and Services Tax, etc.

However, to deal with the novel matter arising with the evolution of the sector, the government has put together a group of secretaries to work on the e-commerce policy.

E-commerce Policy: Shrouded in anticipation

India’s E-commerce policy is a long time coming. The first draft of the National e-commerce policy was introduced in February 2019 and in November 2019, yet another draft on consumer protection in e-commerce also came in. After which, in July 2020 the latest e-commerce policy draft which includes steps that could help local startups and impose government oversight on how companies handle data was rolled out by the government.

Now, after several iterations, the government of India is said to be in the final stages of formulating its draft e-commerce policy which is expected to provide a regulatory framework for governing the unique aspects of e-commerce.  

As per reports, the new policy will ensure that e-retail platforms in India will have to ensure that all sellers on the platform are treated equally and should not use algorithms to give partial treatment to any seller. Furthermore, the new policy is expected to address data and consumer rights, promoting e-commerce as well as issues of fake goods and rules of origin.

  • Promoting e-commerce
    • Working to bring offline sellers to online
    • Open government e-Marketplace for consumer
  • Protecting Consumers
    • E-commerce operators to ensure their algorithm are not biased
    • Create safeguards to ensure sellers products are genuine
    • Platforms to be co-owners of liabilities for counterfeits in case of end-to-end fulfilment.
  • Ensuring Fairness
    • Take out transparent policies on discounts
    • Govt ensures the availability of more service providers to counter digital monopolies.

In this policy, the definition of e-commerce has also been changed. E-commerce in this policy means the business activities of sale, marketing, distribution of goods, or provision of services through the Internet or other information networks. The policy covers all modes of e-commerce; i.e., inventory, marketplace, and hybrid model. This Policy is equally applicable to entities, natural and /or legal with foreign and domestic investments.

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