e-commerce, e-commerce industry
The recommendations of a task force on e-commerce, headed by then commerce secretary, seem to have stoked a sort of turf war. Not just some of the task force’s proposals, but even its delegation of work to other departments to implement its suggested policy changes have irked these ministries and departments, senior government officials told FE.
Given the situation, the Prime Minister’s Office (PMO), which held a meeting of key departments last week on the e-commerce policy, could involve the NITI Aayog or the Cabinet secretariat, instead of the commerce ministry, to monitor implementation of the e-commerce policy involving several departments once it is approved, said an official. As such, the PMO’s will have the final word on the policy framework.
The draft policy was primarily an initiative of the commerce ministry. The task force’s recommendations, based on deliberations with industry players, were submitted with a think-tank on e-commerce, headed by commerce and industry minister Suresh Prabhu. Sensing the opposition to the initial draft policy, Prabhu has also called for further deliberations.
“No department has questioned the need to have a comprehensive e-commerce policy, but they are concerned on two counts: first, policies relating to their domain shouldn’t be decided by some other department or even a task-force; second, the commerce department isn’t really a nodal department to assign work to others,” said another official with a department.
The departments of industrial policy and promotion, electronics and information technology and consumer affairs are among those that have expressed reservations on the proposed policy. The task force has drawn criticism for its suggestions – including making policy changes to enable founders of domestic e-commerce companies to have control even if their shareholding is small, allowing foreign direct investment (FDI) in etailers that hold inventory of all locally-produced items and asking firms to store data locally within two years.
Curbs on deep discounts, bulk purchases of certain items and preference for Ru-Pay have also been sticking points with some stakeholders.
Moreover, the task force’s selection of departments to implement its proposals has attracted opposition. For instance, while recommending up to 49% FDI in online retailers that are holding inventory, the task force delegated the implementation to the Department of Industrial Policy and Promotion (DIPP) and the enforcement directorate. Similarly, the departments of corporate affairs and economic affairs have been tasked with the job of making necessary policy changes to enable founders of domestic e-commerce companies to retain control even with a tiny stake.
The Ministry of Electronics and Information Technology and the department of revenue have been proposed to ensure that all e-commerce firms store consumer data locally within two years. The job of working out a sunset clause that defines the duration of deep discounts by e-commerce platforms has been given to the Ministry of Corporate Affairs, DIPP and the CCI.