Government Proposes Regulating Cross-Border Data Flow in Draft Policy

Flipkart

Flipkart

The new version also strengthens rules pertaining to the foreign direct investment for e-commerce companies.

The draft policy said the framework would be created to provide the basis for imposing restrictions on cross-border data flow from specified sources including data collected by IoT devices installed in public space, and data generated by users in India by various sources, including e-commerce platforms, social media, search engines. As per the national policy, all data stored overseas will not be made available to business entities outside India even with the customers' consent and the data will not be shared with a foreign government, without prior permission of Indian authorities.

The policy is focusing on six broad issues in the ecommerce sector - data, infrastructure development, ecommerce marketplaces, regulatory issues, stimulating domestic digital economy, and export promotion through ecommerce.

"We appreciate the government seeking consultation on the draft e-commerce policy".

It also reiterates the policy stance taken in the FDI norms for e-commerce introduced in December, saying that online marketplaces should not adopt business models or strategies which are discriminatory and which favour one or few sellers/traders operating on their platforms over others.

Further, has proposed banning all parcels, except life saving drugs, coming in through the "gifting" route, as an interim measure to avoid its misuse.

Besides, the policy draws from the draft IT intermediaries guidelines on the issue of taxation and proposes that e-commerce companies providing services in India have a significance local presence. It also suggests making it mandatory for ecommerce sites to have seller details on the marketplace website for all products. "Somewhere the tech industry is also beginning to feel that the free run they had across the globe is coming under watch", says Rameesh Kailasam, CEO of Indiatech, a lobby group for domestic internet companies.

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The draft policy drew mixed reactions from stakeholders.

Besides, the e-commerce player would have to seek a guarantee from the sellers that the product has not been impaired in any manner and that all warranties and guarantees of the brand owner are applicable and shall be honoured accordingly.

The policy "was much desired as the e-commerce business was greatly vitiated by global players", Praveen Khandelwal, secretary-general of the Confederation of All India Traders, said.

".we will provide our inputs during the public review period. We look forward to an enabling policy to serve over 4.5 lakh sellers and a policy that will allow us to scale up our logistics network, create new jobs and infrastructure, digitise payments and delight our customers". As India's homegrown e-commerce pioneer, Flipkart has always been at the forefront of the growth of the industry. "But here, it looks like their focus is to destroy the ability of large entities to operate and that will apply to foreign as well as large domestic players", he said.

A digital technology expert speaking under condition of anonymity said a commercial company should not be forced to share its aggregate data with another company.

The All India Online Vendors Association said in a tweet that the draft covered a lot of issues and made some bold decisions. The e-commerce sector is expected to grow exponentially over the next ten years, largely driven by rapid penetration of smartphones, cheaper data access and growing purchasing power of the consumers across all categories. "Advertising charges in e-commerce must be regulated, especially for small enterprises and startups", states the draft.

The draft touches upon identifying "rogue websites" which deal with pirated content.

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