Why in News?

India decided to stay out of the WTO e-commerce negotiations announced by about 75 members at the World Economic Forum in Davos.

The negotiation agendas:

Permanent moratorium on customs duties.
• Free flow of data located on computer servers without data localization requirements.
• Non-disclosure of source code.
• Prohibition of forced technology transfer.

Problems with E-commerce:

• Highly asymmetrical space with a few dominant players having the potential to distort a level playing field.
• Meaning of e-commerce varies from one country to the other
• E-commerce rules are yet at nascent stage.

India’s stand:

Not to be part of any plurilateral talks because such initiatives strike at the very root of multilateralism. India’s huge data reserve and its impact on real economy and management of data without compromising privacy and security considerations are still in progress. RBI’s recent policy mandating data localization. Unsettled E-commerce regulations especially those related to foreign direct investment: marketplace and inventory model.

Way forward:

• India should manage its huge precious data resource on its own terms.
• Status-quo on e-commerce should be maintained till developing countries understand what is at stake in the area of global e-commerce rule-making.
• Provide weight to India similar stand on e-commerce issues at ongoing talk of RCEP.
• China is a proponent of e-commerce negotiations both at the WTO and RCEP is another reason for India to step carefully.