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DIPP to release Final E-Commerce Policy soon

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The Department of Industrial Policy and Promotion(DIPP) is expected to release the final e-commerce policy nearly, according to the report by Suresh Prabhu, the minister of commerce and industry and civil aviation on 30th January. This was marked during an event organised by the Federation of Gujarat Industries. He also notified regarding the central government who will listen to the suggestions made by the World Health Organisation and also, that the e-commerce policy guidelines will further be upheld by the government.

To improve the functioning and involvement of the local business in INDIA, the minister also brought the idea that the government is looking to introduce sub-national, ease of doing business parameters that would be measured by the government reforms at the district level, to the people’s notice. the orderly announcement was made a day before the changes brought into account in the FDI Policy, as the e-commerce were set to come into effect from 1 February, 2019. Industry stakeholders initially drafted the e-commerce policy that was publicly announced and officially upheld in August 2018 by the ministry of Commerce and Industry.

The draft formulated by the industry stakeholders, somehow, was stalled because of the inter ministerial differences as many departments and ministries estimated the thought of the consultations to exceed the commerce department’s brief. For clarifying the forth coming issues, the central government had to set up a panel including secretaries across department and ministries led by DIPP secretary Ramesh Abhishek. After a month, the commerce policy was handed to the the department by the government, maintaining the conceptualisation of the heading and growing agenda. Some of the modified strengthened changes according to the draft policy are:
• Up to 49% foreign direct investment (FDI) may be allowed in inventory-based ecommerce companies with a condition that they sell products which are 100% made in India
• The e-tailers are prohibited from giving deep discounts through their in-house companies listed as sellers
• Under this policy, the online sale of made in India goods will be promoted  by allowing a limited inventory-based B2C model
• Launch of Central Consumer Protection Authority (CCPA) for protection of consumer interests
• It also suggests giving more control and power to the founders of ecommerce companies than the investors

The new e-commerce policy is also excepted to have a provision for sector regulator that would lend a hand in boosting the sector, promoting exports and ensuring smart actions. The new e-commerce policy specifically aims at promoting the domestic players and ensuring a level playing field and also aims at developing the manufacturing sector, promote foreign technology transfer and consuming foreign investments.

Seeing the sudden growing variations in the e-commerce policy, the US-India Strategic Partnership Forum (USISPF), on December 2018, claimed that the new e-commerce rules are regressive in nature and could also potentially harm the users. Adding further, the US- India trade lobby also marked that the sudden neoteric rules could also create unpredictability and can have a negative impact on the growth of the online retail market in the nation.

The new e-commerce rules might also largely influence companies such as Flipkart and Amazon India which are shouldered by the US-based Walmart and Amazon. While, e-commerce sector is estimated to enhance the revenue of $120 Bn (INR 8.5 Lakh Cr) by 2020, foreign companies are looking to ease their business in India marking a sense of another major step. Also, recently, an unreleased PricewaterhouseCoopers (PwC) study stated that e-commerce sector in the nation might suffer a $45.2 Bn (INR 3.2 Lakh Cr) loss in sales by 2022 because of the changes in FDI circular reflected in the new e-commerce policy, Although, the etailers have expressed their concerns regarding the e-commerce policy, yet, the traditional Indian retail sector is overwhelmed with these new measurements.


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