Govt reviews draft e-commerce policy after facing flak
: India is reworking proposed e-commerce rules after a draft, which had signalled a shift toward boosting domestic startups, sparked criticism, according to people familiar with the matter, who asked not to be identified as the discussions are private.
Commerce minister Suresh Prabhu tweeted August 11 that his ministry had received a “few concerns,” and will reach out to stakeholders to address them. The initial document received pushback, including a proposal on foreign investment in some areas and one requiring Indian consumer data to be held locally, one of the people familiar said. The discussions may lead to an overhaul and a fresh draft will be posted in a few weeks on the ministry’s website, the person said.
The 19-page draft, a copy of which has been seen by Bloomberg, underscored India’s intent to examine every aspect of e-commerce regulation from data localization to antitrust rules. The changes would tighten restrictions on global giants like Amazon.com Inc. and Google and may bolster local startups such as digital payments provider Paytm. The nation’s interest in stricter norms for an Internet market that’s been largely open for decades reflects the pitched battles being fought in segments like online retail, cloud services and digital payments.
Commerce Minister @CimGOI The Ministry had received few concerns regarding the draft e-Commerce Policy following which CIM @sureshpprabhu has directed officials to conduct another round of consultation with stakeholders to address them. The Minister will personally review the draft once it is pre-
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pared.
Broadly the draft had signalled “some kind of protectionist thinking,” said Nandan Nilekani, chairman of Asia’s second-largest technology services outsourcer, Infosys Ltd. “It may stem from a feeling that Indian startups should be given a boost, something on the lines of the China model.”
Unlike its neighbour, India has allowed Silicon Valley giants like Facebook and Google to dominate entire segments including search, social and messaging.
The draft called for creating a “fair environment for domestic digital firms to find their rightful place,” and “levelling the playing field for foreign players and domestic startups.” It proposed a single legislation to encompass all aspects of e-commerce and a single regulator to govern the industry. It also outlined measures that would make local data storage mandatory, curb discounting in online retail and allow founders to keep control of their startups even with a minority stake. Continuing the theme of boosting domestic players, it proposed allowing foreign investments up to 49% in companies that use the inventory model to sell locally-produced goods on online platforms.