New Ecommerce Policy To Keep Check On Huge Discounts Offered By Etailers

The ministry of commerce and industries is set to roll out the second draft of ecommerce policies soon. Besides focusing on predatory pricing, the policy will also bring local sellers on board and ensure data localisation.

To start with, the government may not offer any incentives to attract foreign investment in the ecommerce market, but will reward small retailers that list their products on platforms like Amazon and Flipkart, a Business Standard report highlighted. The government aims to help traders migrate and integrate their business to digital platforms.

Sources close to the matter told the publication that the government will also invite traders body Confederation of All India Traders (CAIT) to its official meets with ecommerce players. Besides this, the Department for Promotion of Industry and Internal Trade (DPIIT) will also hold annual reviews of discounts given by emarketplaces to ensure predatory pricing are dealt with.

Though the IT Ministry is working on data localisation and non-personal data regulations under the Personal Data Protection Bill 2019, the ecommerce policies will also hold guidelines for the same independently.

“Data localisation remains a big concern and despite there being broad government norms on the issue, it would have to be tailor-fit for the ecommerce sector,” an official close to the matter told Business Insider.

The ministry of commerce and industries had previously clarified that it is in talks with the IT ministry over the personal data protection bill to ensure that there is minimal overlap in the two bills. The commerce ministry will soon provide a recommendation in regards to the governance of data.

DPIIT had released the draft ecommerce policy back in early 2019. Under it, the government recommended certain guidelines like data localisation, compliance to the FDA rules and regulations and other business practices.

Since then the commerce ministry led by Piyush Goyal has been actively working on the policies to set regulation on the sector, which otherwise has been a cause of distress for offline retailers. The Confederation of All India Traders (CAIT) has been calling out ecommerce platforms like Amazon and Flipkart for eating into their business and non-compliance with the foreign direct investment (FDI) policies.

The policies were scheduled to be released earlier this year, but the government decided to put in the backburner due to the Covid-19 pandemic. While, the players await ecommerce policies, the government has made it mandatory for them to display the origin of products listed on their platform.

The companies have assured the government that they will ensure that the request will be followed. However, they sought time to make the necessary changes on their websites.