Our Flawed E-Com Policy Sends Out Awful Signals

Context: India’s regulatory framework for e-commerce needs to be market-friendly and not loaded one way or another. Its failure to pass that test will go against our long-term economic interests.

2021 Amendments to the Consumer Protection (E-commerce) Rules, 2020

• Need: The amendments were brought in response to several representations from aggrieved consumers, traders and associations complaining against widespread cheating and unfair trade practices in the e-commerce ecosystem.
• Major provisions:
  • Appointment of Chief Compliance Officer, a nodal contact person for 24x7 coordination with law enforcement agencies and ensure compliance of Consumer Protection Act, 2019 and Rules
  • Putting in place a framework for registration of every e-commerce entity with the Department for Promotion of Industry and Internal Trade (DPIIT) for allotment of a registration number which shall be displayed prominently on the website as well as invoice of every order.
  • Prohibition of Mis-selling, i.e. selling goods or services by deliberate misrepresentation of information.
  • A filter mechanism to identify goods based on country of origin and suggest alternatives to ensure a fair opportunity to domestic goods.
  • Provisions of Fall-Back Liability for every marketplace e-commerce entity, where a seller fails to deliver the goods or services due to negligent conduct.

Issues associated with the amendments

• The Rules are suffused with suspicion of private e-com players, particularly multinational companies.
• Additional compliance norms overlap and conflict with other regulations (such as competition law).
• Restrictive in nature: Restrictions on sharing data within a company and barring ‘related’ companies from selling wares on the same platform hinders the growth of MNC e-com firms and Indian conglomerates 
• Political overtones: Policy cannot be divorced from political economy; the shifting of goalposts for a particular agenda (UP elections) goes against our long-term economic interests.

Conclusion: For India to become a global business destination, all rules need to be market-friendly, serving all participants equally, not loaded one way or another.