DIPP Pledges Support To Ecommerce Firms, Against Consumer Affairs Ministry Proposal To Regulate Ecommerce Sector

The ecommerce firms finally have reason to smile. The Department of Industrial Policy and Promotion (DIPP) has opposed a plan to regulate the Ecommerce sector, arguing that it would curtail innovation and the spirit of entrepreneurship.

There were a number of complaints in the past against ecommerce companies over predatory pricing and unfair business practices that threatened traditional stores. Therefore, the brick and mortar businesses have proposed to impose curbs on the online marketplace that have disrupted the market. However, the DIPP has pledged total support to ecommerce sector.

The DIPP has released a statement supporting ecommerce sector and said, “there should be minimal government interference and that ecommerce must be treated at par with brick and mortar. If there are any specific complaints of consumers, then there are consumer courts for that. We need ease of doing business in the country and not to complicate it for entrepreneurs.”

Recently, the consumer affairs ministry had also floated a proposal to bring ecommerce under the purview of up to nine government agencies and regulatory bodies, including DIPP, the Reserve Bank of India, home ministry, law ministry, department of revenue and ministry of corporate affairs.

According to the consumer affairs department’s proposal, Let’s watch out which department will do what –

RBI – Reserve Bank of India will look into banking and foreign exchange issues related to ecommerce.

Home Ministry – Criminal frauds by ecommerce will be looked into by the finance, corporate and home ministries.

Department of Revenue – The department of revenue will handle taxation related issues.

Ministry of Corporate Affairs – The competition policy related matters will fall within the corporate affairs ministry’s jurisdiction.

Ministry Of IT & Telecom – The ministry of IT and telecom will handle data protection, cyber security and issues related to registration of server and websites.

Consumer Affairs Ministry – The consumer protection issues will be taken care of by the consumer affairs department.

Ministry of Commerce & Industry – The foreign investment and trade policy issues will be under the purview of the commerce and industry ministry.

Information & Broadcasting Ministry – I&B ministry will take care of advertising norms and related matters.

Statistics Department – A database on the sector will be maintained by the statistics department.

According to the recent report by Nomura, Indian ecommerce is expected to be worth $43 billion in five years, of which nearly $23 billion will come from online retail. Another research says that India is ranked at 142 out of 189 in the World Bank’s ease of doing business index.

Therefore, in order to turn ‘Digital India’ and ‘Make in India’ campaign into reality, the government need to work a lot towards improving the environment to promote and reward innovation.