National e-Commerce Policy aims to achieve holistic growth of sector

On 23rd Feb.19 , Department of Industry and Internal Trade released draft National e-Commerce Policy that sends a clear message that India and its citizens have a sovereign right to their data. India has proposed regulating cross border data flows, locating computing facilities within India to ensure job creation and setting up a dedicated ‘data authority’ for issues related to sharing of community data. 

Draft Policy focuses on six broad issues of the e-commerce sector, which includes data, infrastructure development, e-commerce marketplaces, regulatory issues, stimulating domestic digital economy and export promotion through e-commerce.

The policy bars “sensitive” data collected and processed here but stored abroad from being shared with foreign governments and other business entities outside India. It has suggested a three year period for companies to setup data storage here and advocates a review of the current practice of not imposing custom duties on electronic transmissions. 

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Some of the key points are as under :

A. Key Issuers Addressed

• Data ;
• Infrastructure development ;
• e-Commerce marketplaces ;
• Regulatory issues ;
• Stimulating domestic digital economy ; 
• Export promotion .

B. Indian Control Over Data

• Govt to be given access to source code, algorithms of AI systems Impose custom duties on electronic transmissions to reduce revenue loss;
• Bar sharing of sensitive data of Indian users with third party entities, even with consent; 
• A ‘data authority‘ to look at community data. 

C. Local Presence for Apps & Websites  

• All e-commerce websites, apps available for downloading in India to have a registered business entity here;
• Non-compliant ecommerce app/website to be denied access here. 

D. Incentives for Data Localisation

• Location of the computing facilities like data centres, server farms within India; 
• Firms to get 3 years to comply with local data storage requirements; 
• Data storage facilities to get ‘infrastructure status’. 

E. FDI IN e-Commerce

• FDI only in marketplace model;
• No FDI in inventory model. 

F. e-Commerce Trade

• Curbs on Chinese e-Commerce exports ;
• Gifting route, often used by Chinese apps, websites, banned for all parcels except life-saving drugs;
• Integrating Customs, RBI and India Post to improve tacking of imports through e-Commerce ;
• Incentives & e-commerce export promotions; 
• e-Commerce startups may get ‘infant industry’ status raising limit for courier shipments from Rs 25,000 to boost e-Commerce export. 

G. REGUALTIONS 

• No separate regulator for e-Commerce sector;
• e-Consumer courts to be developed. 

Draft Policy has not suggested parameters for its implementation and also it should take into account emerging technologies like AI, ML , IoT and Block Chain.

Final policy will be issued based on inputs from public and various stakeholders .