• The government has released the draft e-commerce policy. The policy focuses on six broad issues of the e-commerce sector, which includes data, infrastructure development, e-commerce marketplaces, regulatory issues, stimulating domestic digital economy and export promotion through e-commerce.

Features of the Policy:

  • Every e-commerce company will have to construct 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 aimed at ensuring compliance with extant laws and regulations for preventing deceptive and fraudulent practices, protection of privacy, safety and security.
  • e-commerce companies are mandated to disclose seller details such as their name, address and contact numbers. Sellers will also be required to provide an undertaking to the platform on the genuineness of their products.
  • Trademark (TM) owners will be given an option to register themselves with e-commerce platforms and whenever a trade-marked product is uploaded for sale on the platform, the platform shall notify the respective TM owner.
  • The policy says that framework will 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 policy grants data the status of the capital. The policy imposes conditions on a business entity that collects or processes any sensitive data in India and stores it abroad.
  • The conditions state that all such data stored abroad shall not be made available to other business entities outside India, for any purpose, even with customer consent.
  • The policy further stipulates that the data shall not be shared with a foreign government, without the prior permission of Indian authorities.
  • The policy calls for a Suitable framework for sharing of community data that serve the larger public interest (subject to addressing privacy-related issues) with start-ups and firms. The implementation of this shall be undertaken by a ‘data authority’ to be established for this purpose.
  • The policy stresses on developing physical infrastructure for a robust digital economy and suggests steps for developing the capacity for data storage in India.
  • The policy aims to invite and encourage foreign direct investment (FDI) in the marketplace model alone.
  • The policy mandates the online marketplaces not to 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. The policy also enlists certain steps which have to be followed by all e-commerce websites/applications.
  • On the issue of taxation related issues in the sector, the draft policy mentions the current practice of not imposing customs duties on electronic transmissions must be reviewed in the light of the changing digital economy and the increased role that additive manufacturing is expected to take.
  • On export promotion through e-commerce, the policy states that there is a need to incentivize and reduce administrative requirements for outbound shipments through this medium.
  • The policy calls to raise the cap of each export order placed online and dispatched through courier or postal mode from current 25000 to make Indian e-commerce exports attractive even for high-value shipments through courier mode.

Draft e-commerce policy: Keeping our data safe and secure:

  • The DPIIT has released the draft National e-commerce Policy that sends a clear message that India and its citizens have a sovereign right to their data.

Indian control over own data:

  • Govt to be given access to source code, algorithms of AI systems Impose custom duties on electronic transmissions to reduce revenue loss.
  • Bar sharing of sensitive data of Indian users with third party entities, even with consent.
  • A ‘data authority to look at community data.

Local Presence of Apps and Websites:

  • All e-commerce websites, apps available for downloading in India to have a registered business entity here.
  • Non-compliant e-commerce app/website to be denied access here.

Incentives for data localization:

  • Location of the computing facilities like data centres, server farms within India.
  • Firms to get 3 years to comply with local data storage requirements.
  • Data storage facilities to get ‘infrastructure status’.

FDI in E-Commerce:

  • FDI only in marketplace model (where multiple vendors come together under an IT based platform).
  • No FDI in inventory model (where inventory of goods and services is owned by e-commerce entity and is sold to the consumers directly).

Certain E-Com Trade Rules:

  • Curbs on Chinese ecommerce exports.
  • Gifting route, often used by Chinese apps, websites, banned for all parcels except life-saving drugs.
  • Integrating Customs, RBI and India Post to improve tacking of imports through ecommerce.
  • Incentives & e-commerce export promotions.
  • Ecommerce startups may get ‘infant industry’ status raising limit for courier shipments from Rs 25,000 to boost ecommerce export.

Regulation for E-coms:

  • No separate regulator for ecommerce sector. E-consumer courts to be developed.


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