India’s e-commerce policy draft looks to favour domestic startups

Amazon Flipkart to display country of origin
(Image credit: Future)

In a quest to offer a uniform playground to the local startups, India has been working on an e-commerce policy that aims at laying out rules of how user’s data is being stored and used by brands like Amazon, Google or Facebook etc, a periodic audit of this data.

The policy draft, that is yet to go public, also directs the companies to provide any data within 72 hours. This could include information related to national security, taxation, law and Order etc., failing which the companies will be liable to pay a fine. 

In light of the recent cross-border tensions, this policy also wants the marketplaces to clearly specify the product’s country of origin and value addition in India for all the imports or exports.

The e-commerce policy draft

The policy is claims it is aimed at better control of user data as well as looking to put the customer in focus and wants the marketplaces to provide details of the sellers like phone numbers, customer complaint contacts, email and addresses. etc to the public.

This draft, created by the federal Ministry of Commerce’s Department for Promotion of Industry & Internal Trade, wants the e-commerce marketplaces to allow the government to access their source codes and AI-algorithms, to ensure that these tech giants do not get an unfair advantage against the competitors. According to the govt, this move will also mean that businesses with a huge stash of user data do not become digital monopolies that can misuse their market leadership position.

The draft policy also talks about a regular to ensure that the industry remains competitive and will be empowered to access information. Further, it will also list out the specific categories that the e-commerce companies are required to mirror data locally.

The draft will be soon made available on a public platform for all the stakeholders to review and provide their opinion.

Impact on the e-commerce majors

The Indian e-commerce industry is one of the fastest-growing industries and has a lot of opportunities. Brands like Amazon, Flipkart and Google have branched out in different categories apart like audio and video streaming, digital payments and more apart from selling products online.

This not only gives them more opportunities to earn but also offers a massive amount of user data which can be further used to cross-sell other products and bind the user into an ecosystem. Also, the government has been getting a lot of complaints from the local bodies regarding frequent online sales that offer products at predatory pricing impacting the local businesses.

With these new policies and regulators in place, the e-commerce companies will have to be fair and would be forced to become transparent. This will not only help the users but will also help the local companies to build their products to gain a foothold in the industry.

Companies like Amazon, Flipkart and Google etc. may agree with the conditional localization of data, however, sharing source codes and algorithms may sound predatory to them.

Via: Bloomberg

Jitendra Soni

Jitendra has been working in the Internet Industry for the last 7 years now and has written about a wide range of topics including gadgets, smartphones, reviews, games, software, apps, deep tech, AI, and consumer electronics.