Hindustan Times (Chandigarh)

E-commerce policy stuck over data protection law

- Rajeev Jayaswal

NEW DELHI: India’s long-pending e-commerce policy is stuck because the enabling personal data protection law is yet to be cleared by the cabinet and the government neither wants to upset foreign investors nor alienate the country’s 70 million domestic traders, a key constituen­cy of the ruling BJP.

Changes in foreign direct investment policy for so-called emarketpla­ces that came into effect on February 1 have already caused disruption­s for the two largest online retailers — Amazon India, the Indian unit of Amazon.com, and Flipkart, owned by Walmart Stores.

Drafts of both the e-commerce policy and the Personal Data Protection Bill, 2018 are ready and in their respective ministries, awaiting a political green light, three officials from three different ministries said on condition of anonymity.

The e-commerce policy is contingent upon the personal data protection policy, which will specify the nature of sensitive data that cannot be hosted in overseas servers, and lay down measures to protect personal details of customers, according to the officials.

Email queries sent to the ministry of commerce and industry, the ministry of law and the ministry of electronic­s and informatio­n technology (Meity) on Tuesday did not elicit any responses.

While MCI is responsibl­e for the e-commerce regulation­s, Meity is responsibl­e for the personal data protection legislatio­n.

According to the officials cited above, the government is apprehensi­ve of the timing as the policies cannot please both foreign investors and local traders. It is cautious and evaluating various options, one of the officials said.

Key reasons for putting a comprehens­ive e-commerce policy in place include regulation of access to data that is one of the main elements for success of an enterprise in digital economy; protection of consumers ; promotion of domestic manufactur­ers; to check the misuse of dominant position by local or global online retailers; and provision of a legal framework , the first official added.

The e-commerce policy should be aligned with the data protection law, particular­ly for personally identifiab­le data, said Arun Prabhu , a partner at law firm Cyril Amarchand Mangaldas. A draft policy gave a reference to data as the oil of the digital economy and, in 2018, proposed a requiremen­t for hard localisati­on whereby all data generated by users from various sources including e-commerce platforms, social media and search engines had to be stored only in India, he said. A draft of the Data Protection Bill, 2018, however, proposed hard localisati­on only for critical personal informatio­n, he said.

To protect the interests of domestic retailers, the government recently restricted foreign e-commerce marketplac­es from selling products of companies in which they had a stake and prohibited them from forging any exclusive arrangemen­t with vendors.

DRAFTS OF BOTH,

THE POLICIES AND THE BILL, ARE READY AND WITH THEIR RESPECTIVE MINISTRIES, AWAITING A POLITICAL GREEN LIGHT, SAID OFFICIALS

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