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Keep Data Policy Separate From Ecommerce Policy, Say Startups

Keep Data Policy Separate From Ecommerce Policy, Say Startups

LocalCircles conducted a five-point survey to understand the reaction to ecommerce policy draft

About 29% of the respondents said limitation on sharing data overseas with group companies will affect business

According to Sachin Taparia, this may limit the chances of Indian startups being acquired by foreign companies

According to a survey by online citizens’ forum LocalCircles, around 74% of the participating startups and SMEs said that the current draft ecommerce policy should be divided into two separate drafts – business data policy and an ecommerce policy.

LocalCircles had conducted a five-point survey to assess what businesses and citizens feel about the draft ecommerce policy. The survey results were concluded on the basis of 15K responses from more than 6K startups and SMEs, and over 6,500 votes from common citizens.

Upon being asked about the current ecommerce policy draft, majority of the respondents that the business data policy which forms a major part of the policy should not only cover ecommerce, social media, computing and technology but also every other  business verticals such as physical retailers, banks, telecom companies, airlines, automobile companies.

In February, the Department for Promotion of Industry and Internal Trade (DPIIT) publicly released the draft ecommerce policy. The department has proposed regulation of cross border data flows and enabling sharing of anonymised community data.

The Draft National Ecommerce Policy is mainly focussed at data, infrastructure development, ecommerce marketplaces, regulatory issues, stimulating the domestic digital economy, and export promotion through ecommerce. Some of the proposed aspects of the policy are:

  • The companies to set up data storage in India to store the data of Indian users
  • Ecommerce companies will be prohibited to store consumer data with third party entities even with consumer consent
  • It proposed constituting a dedicated ‘data authority’ for issues related to sharing of community data

The Debate On Customer Data

While speaking to Inc42, LocalCircles chief executive Sachin Taparia explained that a big part of the policy majorly talks about how data should be handled. If the policy is focusing on how data should be aggregated then it should be similar for all the sectors and not only ecommerce.

The survey results also revealed that 29% of the respondents felt that the feature which prohibits the companies from sharing aggregated data with overseas entities including group companies will have a negative impact on the business.

“Many businesses route the user data to their group companies based in various geographies for better analysis or product improvement and features development and such a rule according to them would highly limit their ability to use global talent to improve their products and services in India,” the survey noted.

While explaining the results, Taparia said that this proposition may limit the chances of acquisition of the Indian startups by foreign companies. He added that flexibility in data sharing between group companies is very important for business growth.

This revelation comes in after LocalCircles had raised similar concerns to DPIIT during the stakeholders’ meeting on March 9 held by DPIIT. the company had recommended the department to split the policy into two halves — ‘Ecommerce Policy’ and ‘Business Data Policy’.