India Needs A Digital Commerce Ministry
The new draft e-commerce policy has become a bone of contention for various ministries and government bodies. Seldom have we seen in the last decade or so that a policy has been drafted bordering insanity. Digital Commerce is a labyrinth and it touches almost every aspect of trade. While a cohesive e-commerce policy must have been the objective of policy framers, the outcome reveals lack of objectivity, common sense and certainly demise of the industry which is slated to contribute almost 50% of India's entire economy by 2030.
While IT Act 2000 is the umbrella to govern digital commerce companies, however domain of business-related ministries come up with laws and bye laws from time to time. This has hampered the growth of the digital commerce industry. From selling of medicines to sex toys, from limited range civilian drones to offering deep discount on retail products, digital companies have to follow various regulations and often the regulations that are imposed without industry acknowledgement. This hampers the growth of the sector. It is imperative to have uniform policy when it comes to foreign investment and competition. Those laws are well defined and laid down. Yet, it was the Consumer Affairs Ministry that went to work on draft e-commerce policy and not MEITY.
Lo and behold in the draft ecommerce policy there is a clause that states, “No e-commerce entity which holds a dominant position in any market shall be allowed to abuse its position.” Clearly the policy makers at Consumer Affairs Ministry are blithely unaware of the rules drafted under Competition Act, 2002, of the Competition Commission of India. Then there are clauses such as Data localisation which falls in the ambit of Data Protection Law; a clause that ensure none of any ecommerce company’s associated enterprise is listed as a seller; the “fallback liability” clause that will hold an ecommerce platform liable for any listed business on its platform failing to deliver goods or services ordered by the consumer; and the “flash sale” clause that refers to “significantly reduced prices, high discounts or any other such promotions or attractive offers for a predetermined period of time…”. While the Consumer Affairs Ministry said that the new draft e-commerce policy is consumer friendly, all it reeks is of protectionism and bias towards large ecommerce platforms. In their endeavour to curtail the dominance of Amazon and Flipkart, the draft e-commerce policy, if implemented, will kill Indian e-commerce players.
This brings us to the moot point – should India have a dedicated Digital Commerce Ministry?
Every ministry wants a share of pie in policy formation to prove their dominance in digital economy. From creation of millions of jobs to growth in contribution to GDP, the digital commerce sector can be termed as the Kohinoor of the future. Barring taxations and finance regulations (Ministry of Finance), foreign investment (DIPP), most ministries will lose out if there is Ministry of Digital Commerce.
But for the sector, a separate ministry will usher in a new phase that will give growth an impetus. Forming a separate ministry for digital commerce sector will also enable ease of doing business, as new entities will not have to run through a maze of regulations that have been thrusted upon the industry by various ministries. While the Ministry of Digital Commerce will be the nodal ministry for any online transaction-based entity, however, the brick-and-mortar model business wings of online business should be governed by laws and regulations of ministries by which they are bound. This will ensure that independence of ministries is maintained. This will lead to transparency and accountability. Many traditional businesses are now operating in dual platforms, but there are too many grey areas. Today, an entity has to follow regulations of various ministries to do digital commerce. However, if that is solved, then ease of doing business become convenient both for the entity as well as for the government.
The biggest challenge for the new ministry will be adaptability. Technology is disruptive and dynamics of the digital commerce is ever changing. The luxury of drafting policies over a period of time will be unavailable, inter-ministerial coordination will have to be almost real-time but above all, understanding this vibrant ecosystem might be a challenge for officials. The bright side is India have a fairly young pool of bureaucrats for whom taking up this challenge will be an opportunity to excel. The new ministry has to create a policy framework that is amenable and can incorporate changes with time. A rigid, long-term policy is not what this ministry should frame. While policies thus far have concentrated on consumer e-commerce, there has been scant concentration on B2B and O2O e-commerce. Again, the stress is on a new ministry and unless it is formed, the sector will continue to reel under half-baked policies.
If there is anyone who can separate the chaff from wheat, it is our Hon’ble Prime Minister. He is tech savvy, realised the potential of e-commerce much before many other leaders of his stature and has a clear vision about India’s economic growth. I would go at length to say that if anyone can envision Digital Commerce Ministry, globally, it is Shri. Narendra Modi.
The draft e-commerce policy is a death knell for the sector. It is not only badly drafted but also lacks the moral fibre of a good policy. No wonder, there are ministries and government agencies who are up in arms with the proposed changes to the Consumer Protection (E-Commerce) Act, 2019.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.
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