National E-Commerce Policy

• 06 Jun 2023

Why in News?

The Indian government is set to introduce a national e-commerce policy that aims to create a favorable environment for the development of the sector and drive exports.

• The e-commerce policy was first proposed in 2018 and in 2019, a draft of the e-commerce policy was released.
• Department for Promotion of Industry and Internal Trade (DPIIT), the Ministry of Commerce and Industry emphasized the need for a streamlined regulatory framework, technological advancements, and efficient supply chain integration.

What are the Key Points About the Upcoming E-Commerce Policy?

• Aim:
  • The national e-commerce policy aims to establish a regulatory framework that facilitates ease of doing business in the sector.
• Boosting Exports:
  • The policy recognizes the significant export potential of India's e-commerce sector.
    • By 2030, India's e-commerce export potential is estimated to range between 200 billion USD to 300 billion USD annually.
    • With global cross-border e-commerce exports projected to reach 2 trillion USD by 2025, India aims to capitalize on this growth opportunity.
• Regulatory Body and FDI:
  • The possibility of establishing a regulator for the e-commerce sector is being considered, but its implementation may take time.
  • Local traders' associations have been advocating for an empowered regulatory body to enforce e-commerce rules and curb violations.
  • While 100% foreign direct investment (FDI) is allowed in the marketplace model, FDI is not permitted in the inventory-based model.
• Addressing Trader Concerns:
  • Traders have expressed concerns regarding the violation of e-commerce rules, such as deep discounts and preferences given to select sellers.
  • The policy intends to clarify these issues and provide greater transparency in the rules governing FDI in e-commerce.
  • The Consumer Protection (e-commerce) Rules 2020 and proposed amendments will be aligned with the e-commerce policy for consistency.
• Comprehensive Framework:
  • The e-commerce policy will serve as an overarching framework for the sector, ensuring coherence among various governing acts.
    • The sector is governed by the FDI policy, the Consumer Protection Act, of 2019, the Information Technology Act of 2000, and the Competition Act, of 2002.
  • The policy aims to streamline these regulations and create a conducive environment for the growth of the e-commerce industry.

What are the Other Related Indian Government's e-commerce Initiatives?

• Launching the BharatNet project:
  • Provide internet connectivity in local bodies in every Panchayat, which will increase the reach and access of e-commerce in rural areas.
• Open Network for Digital Commerce (ONDC):
  • A network that aims to provide equal opportunities for Micro, Small and Medium Enterprises (MSME) to thrive in digital commerce and democratize e-commerce
• Digital India initiative:
  • The Digital India initiative has provided solid impetus to other government-led initiatives, including Start Up India and Aatmanirbhar Bharat, which have great potential to translate into global success.

Source: FE