DRAFT E-COMMERCE POLICY

The Department of Industry and Internal Trade has released the draft National e-commerce Policy. The primary focus of the draft policy is centralisation of data arising in India and promotion of its use for the country’s development.

It sends a clear message that India and its citizens have a sovereign right to their data, with emphasis on securing data arising in India and treating it as a ‘national asset’. The policy makes a strong case for championing ‘Indian’ online enterprise and may have major implications for foreign-owned ecommerce majors operating in India.
E-commerce – E-commerce means buying and selling of goods and services including digital products over digital & electronic network. E-commerce business have two models:
  • Inventory based model of e-commerce- Inventory based model of e-commerce means an e-commerce activity where inventory of goods and services is owned by e-commerce entity and is sold to the consumers directly.
  • Marketplace based model of e-commerce- Marketplace based model of e-commerce means providing of an information technology platform by an e-commerce entity on a digital & electronic network to act as a facilitator between buyer and seller.

Key features of the draft:

  1. Restrictions on Cross border flow of Data: The data that is collected by ‘Internet of Things(IoT)’ devices installed in public space and data generated by users in India from various sources, including e-commerce platforms, social media, search engines etc. The draft restricts sharing of sensitive data which has been collected or processed in India and stored abroad to other business entities outside India or third parties even with the customer consent. Such data cannot be made available to a foreign government, without the prior permission of Indian authorities and immediate access to all such data is to be given to Indian authorities upon request.
    The issue is that these restrictions seek to exercise sovereignty over data and has been termed as a highly protectionist move.
    While the implications of such a law could have widespread effects on the way tech giants such as Google, Facebook, Amazon, Walmart and several conduct business here, the proposed policy does not explain how the government plans to implement these changes.
  2. Establishment of Data Authority: It will be set up along with a suitable framework for sharing of community data that serves ‘larger public interest’.

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