The Department of Industrial Policy & Promotion (DIPP), functioning under the Union Ministry of Commerce and Industry has once again reiterated that it is in the process of drafting an all new policy framework covering the ecommerce sector in India. This message has been in the air and the concerned minister Suresh Prabhu had issued a statement in the Indian parliament as well a couple of days ago. Now the confirmation has come from the Secretary DIPP, Ramesh Abhishek. In addition to this a group of secretaries in the Central Government is also looking into the issues related to the ecommerce business.
An earlier policy paper prepared and circulated by the department of commerce within the commerce ministry reportedly saw heavy criticism and some even questioned the department’s locus standi in preparing the policy. They felt it was within the domain of the DIPP and that is how the DIPP is seized of the matter now. There is also the pressure from a global perspective since some influential members of the World Trade Organization (WTO) have insisted that countries must have an exclusive policy to govern the ecommerce trade in their respective countries. Possibly these countries have large corporations that sell their products in many countries and wish to bring on indirect pressure to make things easier for them to do business in the countries where such laws are missing.
Ecommerce sector has attracted FDI in huge amounts and global giants like Amazon and Walmart directly and Alibaba indirectly have entered the segment. It brings in a lot of employment too, as these companies set up massive warehouses and have enormous logistics to take care of.
But the traditional retailers oppose the unfettered freedom given to the ecommerce players. They feel their existence is threatened when these online retailers offer deep discounts and disrupt the market. The fact is online retail in India is not even a fraction of the overall volumes, but the government cannot afford to antagonize any section of the community especially in an election year.