The government, on February 23, released the draft that proposes setting up 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.
“We appreciate the government seeking consultation on the draft e-commerce policy. We are going through the draft, which has been just released for comments and will be sharing our inputs in due course. As India’s homegrown e-commerce pioneer, Flipkart has always been at the forefront of the growth of the industry. We look forward to working with the government and other stakeholders in developing this nascent sector…” a Flipkart spokesperson said.
Amazon India, in an e-mailed statement, said the company is also currently studying the draft policy.
“…we will provide our inputs during the public review period. We look forward to an enabling policy to serve over 4.5 lakh sellers and a policy that will allow us to scale up our logistics network, create new jobs and infrastructure, digitize payments and delight our customers,” the statement added.
The 42-page draft addresses six broad issues of the e-commerce ecosystem — data, infrastructure development, e-commerce marketplaces, regulatory matters, stimulating domestic digital economy and export promotion through e-commerce.
On e-commerce marketplace businesses, the draft said the policy aims to invite and encourage foreign direct investment (FDI) in the marketplace model “alone,” which is being carried out by companies like Flipkart and Amazon.
Online marketplaces should not adopt business models or strategies which are discriminatory and which favor one or few sellers/traders operating on their platforms over others, the draft clarifies. It also enlists specific steps that have to be followed by all e-commerce websites/applications.
A Snapdeal spokesperson said framing a comprehensive national policy on e-commerce is a welcome move that will provide a “facilitative policy environment” for India’s fast-growing digital economy.
“The draft policy’s categorical rejection of inventory based e-commerce model must be followed by effective implementation of FDI norms to ensure marketplaces do not own or control inventory, directly or indirectly. The recognition of data as a strategic national asset is well-timed and will lead to the development of required regulation in this regard,” the spokesperson added.
One of the proposals states that a business entity that collects or processes any sensitive data in India and stores it abroad shall be required to adhere to certain conditions. All such data stored abroad shall not be made available to other business entities outside India, for any purpose, even with the customer consent, it added.
Further, the data shall 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, the draft said.