By admin March 9, 2019 05:43


What is the e-commerce policy?

It proposes setting up of a legal and technological framework for restrictions on cross-border data flow and also laid out conditions for businesses regarding collection or processing of sensitive data locally and storing it abroad.


  • It addresses six broad issues of the e-commerce ecosystem — data, infrastructure development, e-commerce marketplaces, regulatory issues, stimulating domestic digital economy and export promotion through e-commerce.
  • 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.
  • India’s data should be used for the country’s development and Indian citizens and companies should get the economic benefits from the monetisation of data.
  • A business entity that collects or processes any sensitive data in India and stores it abroad, shall be required to adhere to the certain conditions.
  • The conditions state that all such data stored abroad shall not be made available to other business entities outside India, for any purpose, even with the customer consent.
  • Further, the data shall also not be made available to a third party for any purpose and it would also not be shared with a foreign government, without the prior permission of Indian authorities.
  • Suitable framework will be developed for sharing of community data that serves larger public interest (subject to addressing privacy-related issues) with start-ups and firms.
  • The larger public interest or public good is an evolving concept. The implementation of this shall be undertaken by a ‘data authority’ to be established for this purpose.
  • An e-commerce platform, in which foreign investment has been made, therefore, cannot exercise ownership or control over the inventory sold on its platform.
  • 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.
  • Besides, all e-commerce sites/apps available for download in India must have a registered business entity in India as the importer on record or as the entity through which all sales in India are transacted.
  • Existing statutes and laws need to evolve to take into account the changing ways of doing business and changing business models.
  • An assessment needs to be done regarding how data-storage-ready the available infrastructure in the country.
  • A time-frame would be put in place for the transition to data storage within the country. A period of three years would be given to allow industry to adjust to the data storage requirement.

Why was the policy required?

  • E-commerce has been evolving over the past decade with a very rapid pace.
  • Indian e-market place was pegged at $38.5 billion in 2017 which is expected to touch $200 billion by 2026.
  • However it accounts only for 3% of the retail sector.
  • It has started posing a threat to the brick and mortar commerce sector in most developing countries.
  • 90% of the industries are in the informal sector which are mainly small shops. They need to be protected from the intense competition of large industries that have the capability of investing heavily in business.
  • The policy was required for encouraging a healthy competition between the foreign players and the domestic players.
  • The digitalization drive by India is further propelling e-commerce which requires regulation.
  • Most jurisdictions are not conversant with the developments that have taken place globally and the direction in which things are moving and the pace of the developments.
  • It is important to have a policy framework which will benefit the domestic stakeholders like the MSMEs, industries, etc.
  • Moreover the customers also need a regulatory framework to address their concerns.
  • Also, India needs to have a policy in space before it gets into any agreement with the WTO regarding e-commerce policy and being guided by policies of developed countries.


  • The policy is in line with data protection and privacy laws.
  • India being the largest generator of data will become an example for other countries to follow the lead.
  • The policy seeks to provide a level playing field for the domestic industries.
  • It will help promote exports.


  • India has not enacted a data protection law yet.
  • E-commerce marketplaces would face an increase in compliance costs.
  • Such rules have an adverse bearing on FDI inflows in a sector that offers immense growth potential.


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By admin March 9, 2019 05:43