Draft e-commerce policy: Amazon, Walmart wary about appointment of regulator; feel blueprint tilted towards domestic cos

Foreign companies like Amazon and Walmart have reportedly become wary of India’s proposed e-commerce policy, which plans to create a level playing field by ensuring that all websites, involved in e-commerce transactions from India, follow domestic rules. According to The Economic Times, the American giants feel the draft policy is tilted towards domestic firms. They are also concerned about the government’s plan to push an e-commerce regulator into the picture. The American firms are likely to ask the Donald Trump administration to reach out to its Indian counterpart if the final policy is “not moderated”, two industry executives familiar with the development told the newspaper. “We expect a barrage of letters to be exchanged between US authorities and the Indian government, in case the policy doesn’t become more even-handed,” an unnamed source was quoted as saying by The Economic Times. The government is mulling a single legislation to regulate all aspects of the e-commerce business, and is also exploring the idea of putting in place a watchdog to monitor all sector-related issues, according to the draft policy document. The government aims to remove the legal fragmentation governing the e-commerce sector, according to the Draft National Policy Framework on e-commerce. It has also suggested the creation of a central consumer protection authority to act as a nodal agency for intra-government coordination, mandatory registration of all e-commerce operators and registration of complaints. [caption id=“attachment_4867221” align=“alignleft” width=“380”]  Representative image. Reuters[/caption] “The legal framework governing unsolicited commercial SMSs and calls would be strengthened. A law/regulation to govern unsolicited commercial e-mails would be framed,” the draft stated. “A single legislation to address all aspects of e-commerce would be enacted and a single regulator would be set up to consider issues like FDI implementation,” the initial draft said. Industry sources, however, feel that the e-commerce industry is going back to the days of the infamous ‘Licence Raj’ with these “stringent regulations”. Some of the measures suggested in the draft include local data storage, mandating the use of state-run RuPay payments in online transactions and enhancing the participation of micro, small and medium enterprises (MSMEs) in online retail. Also, a 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 providing deep discounts – the draft has suggested introducing a pre-set timeframe for offering differential pricing or deep discounts to customers. The aforementioned suggestions are part of a strategy to address anti-competitive issues in the e-commerce sector effectively. “The restriction imposed on e-commerce marketplace, to not directly or indirectly influence the price of goods and services, would be extended to group companies of the e-commerce marketplace. “A sunset clause, which defines the maximum duration of differential pricing strategies (such as deep discounts) that are implemented by e-commerce platforms to attract consumers, would be introduced,” it said. In May, Walmart Inc said it would buy a 77 percent stake in Flipkart for about $16 billion (Rs 1.05 lakh crore). The deal will give the US retailer giant access to the Indian e-commerce market, estimated to grow to $200 billion within a decade. --With inputs from PTI