74% startups want government to separate data policy from e-commerce regulations, says survey

By: |
March 30, 2019 5:16 PM

Out of 6,000 startups and small businesses surveyed by LocalCircles, 74% said that the DPIIT should separate data policy from the draft e-commerce policy, which aims to regulate India's fast growing e-commerce sector dominated by Amazon and Walmart-owned Flipkart.

ecommerce, ecommerce sector, ecommerce industryOnly 29 per cent startups said that government has the right to ask for a business’s aggregated data anytime.

A little over a month after the Department for Promotion of Industry and Internal Trade (DPIIT) launched India’s e-commerce policy draft inviting comments from the stakeholders of the startup ecosystem, a whopping 74 per cent startups/small businesses have said that the government should separate the policy part pertaining to business data from the e-commerce regulations. The draft policy will be regulating fast-growing e-commerce market in India currently dominated by Amazon and Walmart-owned Flipkart.

“This has what come up in the survey to have a separate data policy so that the e-commerce policy can cover all e-commerce aspects like counterfeiting, online views, ratings, cross border e-commerce, marketplace, etc. Then your data policy also gets broader to apply to all businesses including telcos, banks, insurance companies, healthcare, social media, offline retail etc,” Sachin Taparia, Founder and Chairman LocalCircles told Financial Express Online.

Interestingly, with respect to data localisation, 53 per cent per cent respondents said that barring data sharing with foreign companies including group subsidiaries would not negatively impact their businesses, said the LocalCircles survey conducted among 6,000 startups and SMEs and more than 6,500 common citizens post February 26, 2019.

“While this makes work easy for the government but we have suggested the government that group companies must be able to share data with each other. Customers today are so much used to global platforms like Facebook, Whatsapp that if your UI/UX design is not as good as theirs then users would go away. So to retain them, you need global talent,” said Taparia.

For instance, under existing draft regulation, a company cannot hire let’s say a UI/UX designer who is on the payroll of its US subsidiary to share its data with the subsidiary company. Also if a US company wants to buy an Indian company to take it global, they will need access to the company’s platform, aggregated data, etc. Under such a scenario, said Taparia, Indian companies will face limitations.

Here are some other interesting findings from the survey:

  • Only 29 per cent startups said that the government has the right to ask for a business’s aggregated data anytime.
  • Only 26 per cent startups approved of the government’s right to seek source code and algorithms from a business anytime.
  • 68 per cent citizens said that they have limited or no confidence in the government’s ability to save their data from being compromised.

“In 2017, the CIS report stated that Aadhaar data of 130 million Indians was leaked from the government websites. According to another report, WikiLeaks last year shared that the CIA might have access to the entire Aadhaar database as well. Such incidents have lowered citizens’ trust,” the survey said.

DPIIT has started working on the comments and suggestions it has received from stakeholders on the draft e-commerce policy after the deadline for sharing feedback ended on Friday. The department had extended the deadline from March 9 earlier and doesn’t intend to extend it further, PTI quoted sources.

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