The Prime Minister’s Office (PMO) is examining the national e-commerce policy to understand its potential impact on domestic retailers and small players, two people aware of the matter said. “The policy is in its final stage and will be released soon after the approval by the PMO,” said one of the people, adding the much-awaited policy will protect the interests of both consumers and industry.
The development is significant given the draft policy framed by the Union commerce ministry has recommended relaxations for companies that operate on e-marketplace business models such as Amazon, Flipkart and others.
The evaluation by the PMO follows a meeting on 2 August conducted by the Department for Promotion of Industry and Internal Trade (DPIIT), which is formulating the national e-commerce policy, with all stakeholders including representatives of e-commerce firms and a domestic traders’ body.
The relaxations suggested in the policy include separate norms for marketplace and inventory models of e-commerce on appointment of nodal grievance officers, no mandatory registration on the Open Network for Digital Commerce (ONDC) for e-commerce majors, no provision for setting up of an independent regulator for online retail platforms; etc.
Queries sent to the PMO, ministries of commerce and consumer affairs, secretaries of DPIIT and consumer affairs, and Amazon and Flipkart remained unanswered till press time.
An e-commerce industry leader who spoke on condition of anonymity expressed concern that these relaxations may not make it to the final policy given that e-commerce is highly contentious, and relaxations are opposed by conventional retailers.
“The current e-commerce scenario has an uneven playing field, giving many disadvantages to small businesses,” said Praveen Khandelwal, general secretary of the Confederation of All India Traders (CAIT). “Now, it’s high time that both the e-commerce policy and its rules should be notified immediately as it has been assured.”
The domestic traders’ body demands foolproof e-commerce rules against predatory pricing, deep discounting and loss funding. “Any entity having an economic interest should not be allowed to sell products on its own e-commerce platforms,” Khandelwal added, referring to the practice of marketplace platforms in India selling their own products, called white labels.
The proposed policy has no provision for setting up of an independent regulator for online retail platforms, and e-commerce firms will have to comply with the Digital Personal Data Protection Act for data-related issues as the proposed policy will not cover that area, the first official said. A detailed presentation in this regard was given to the PMO, the official cited earlier said.
The draft policy calls for mandating e-commerce players to procure agricultural products directly from farmer producer organizations and cooperatives, the officials mentioned above said. It also has watertight norms for e-tail giants on predatory pricing, and mandatory registration of all type of e-business portals with DPIIT.
“A certificate issued by DPIIT to registered e-commerce portals will be mandatory for validation of online portals’ existence. It will save consumers from being cheated by fake or unregulated portals,” the second official cited above said.
The draft policy has also pitched for relaxing mandatory registration on ONDC for e-commerce majors, as reported by Mint on 22 November. Instead, it is likely to propose voluntary registration.
The policy also talks about separate norms for marketplace and inventory models of e-commerce on appointment of nodal grievance officers.
The marketplace model refers to platforms that connect thousands of sellers with potential buyers, but do not store the products or manage their supply. Amazon and Flipkart, among others, operate on this model.
In the inventory or warehousing-based model of e-commerce, platforms store inventory from brands, merchants and sellers, manage the inventory, and sell the products directly to consumers.