Government draft policy on e-commerce: Seller groups divided over recommendations

The All India Vendors Association has said that it won’t accept the policy as the government didn’t include them in the discussions.
Government draft policy on e-commerce: Seller groups divided over recommendations
Government draft policy on e-commerce: Seller groups divided over recommendations
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With Commerce Minister Suresh Prabhu chairing a meeting of a think tank of industry and government representatives on Monday, the government is expected to make public a draft policy on the e-commerce sector. The policy is expected to look at various aspects of online trade and promote Indian e-commerce companies.

However, domestic seller association All India Vendors Association (AIOVA) has said that it won’t accept the policy as it hasn’t been made part of the discussions, despite repeated requests to the government.

“We were not invited to the discussions though we wrote several times to minister Suresh Prabhu. They don’t seem to be interested in making Indian domestic sellers a part of the discussion. We won’t be accepting the policy. This policy is just a face-saving meeting. We don’t expect anything concrete to come out of it,” said a spokesperson from AIOVA, which has over 3,500 sellers as members.

This is the fourth time the think tank will be meeting after holding its first meeting in April where it was decided that a task force to finalise the policy would be set up. E-commerce companies such as Snapdeal, Paytm, MakeMyTrip, Bharat Matrimony, Urban Clap, Oyo and Ola took part, as per an Economic Times report. From the government’s side, senior officials from the commerce, finance ministries, departments of economic affairs and information technology, DIPP, Competition Commission of India and industry groups such as FICCI and CII, Internet and Mobile Association of India and officials from Central Bank participated.

However, in the meeting being held today, the Confederation of All Indian Traders (CAIT) has been called to attend and has noted a few suggestions to be made for the betterment of sellers. CAIT, along with AIOVA, has been calling for an e-commerce policy to bring in a level playing field.

“I have gone through the draft, they have emphasised a lot on data privacy, which is certainly an important matter. How the data is acquired and controlled has been one of our concerns. It also addresses predatory pricing and malpractices, which we were demanding,” Praveen Khandelwal, Secretary General, CAIT said.

Praveen added that while the draft is mostly in line with their expectations, there are a few concerns, which he will be addressing in the meeting.

“The policy has mandated that Rupay be incentivised. But our submission is that Bharat QR be incentivised instead as it is a better position for all kinds of payments in digital form,” he said.

Praveen says that CAIT also wants cash-on-delivery to be prohibited. “When we are going digital, what is the need for cash-on-delivery? Every time a payment is made on COD, it gives e-commerce companies ample chances to evade supplies. If it’s digital, the payment will be recorded and companies cannot evade liability of tax,” Praveen said.

The most important suggestion, Praveen claimed, is that there has to be a provision to regulate the industry to ensure that e-commerce isn’t used as a tool to infiltrate the retail market with imported goods.

AIOVA, on the other hand, claims that the government may kill the industry through its policy, which doesn’t address the concerns of domestic sellers. It has been giving recommendations to the government over the past two years, which it says have not been taken into consideration.

Some of its recommendations include creating a list of model rules, which need to be followed by marketplaces in terms of seller policies, compliance in states and centre, and dispute resolution and reporting mechanisms. It also wants rules and reporting mechanisms to be put in place to safeguard funds collected on behalf of sellers to ensure settlements are made on time. It has in the past also recommended that easily accessible officers are appointed at government and marketplace level to solve queries, come up with accounting and auditing standards, which can verify compliance in pricing.

According to the ET report, the government is looking to see if the industry needs a nodal agency or more laws to ensure a level playing field where domestic companies don’t feel threatened by international players coming in, while not bringing in restrictive or protectionist measures.

Other core issues that the think tank is looking at include data privacy, taxation, data localisation, regulation and so on. There were reportedly discussions on foreign direct investment in e-commerce as well.

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