As ministries argue, draft ecommerce policy lands with PMO
The proposed ecommerce policy has now landed in Prime Minister’s Office (PMO) as ministries and departments questioned the role of the department of commerce and also some of the provisions of the policy.
The policy was discussed in the PMO last Saturday in a meeting attended by officials of Niti Aayog, finance ministry, corporate affairs ministry, ministry of micro, small and medium enterprises and Department of Industrial Policy and Promotion (DIPP) among others.
vel meeting discussed the differences, an official aware of the meeting said, adding that the draft policy was discussed.
ET had reported that DIPP, consumer affairs and information technology ministry, among others, have opposed certain clauses of the proposed ecommerce policy.
In particular, the ministries had issues with clauses related to data localisation, setting up of an ecommerce regulator, move to allow 49% foreign investment in inventory-based online retail, restrictions on deep discounts, and preference for Ru-Pay. Niti Aayog has also voiced concern over the policy.
The department of commerce is expected to put out a fresh draft of the policy taking into account the issues raised.
In the meeting with the PMO, some ministries and departments have also raised issues with department of commerce hiving off some tasks to others.
“It was pointed out that instead of delegating work, the commerce department should have brought out the policy document only,” said another official in the know of details.
DIPP, the agency that formulates foreign direct investment (FDI) policy and promotes, approves and facilitates FDI, has been asked to prepare a law on domain name registration, while the ministry of electronics and information technology (MeITY) has been asked to fast-track a national encryption policy.
Similarly, the consumer affairs ministry was tasked with setting up a central consumer protection authority for mandatory registration of all ecommerce operators and act as the nodal agency for intra-government coordination.
Competition Commission of India has been asked to flesh out the aspect of sunset clause for deep discounting and their duration.
The draft policy makes a strong case for championing ‘Indian’ online enterprise and may have major implications for foreign-owned ecommerce majors operating in India.
It suggests Indian-owned and Indian-controlled online marketplaces be allowed to hold inventory as long as products are 100% domestically produced.
Such businesses can have up to 49% FDI, a decision that has been opposed by many stakeholders.
This relaxation on marketplace ecommerce firms is not available for entities controlled by foreign investment.