The document states that the pace of digital India needs to be accelerated through a facilitative ecosystem to spur digital innovation within the country.

Govts draft e-commerce policy Limits predatory pricing allows hybrid marketplace
Atom E-commerce Tuesday, July 31, 2018 - 07:57

After several rounds of discussions with various stakeholders, the government has released a draft of the national e-commerce policy. In its draft, the government recognises that for India to fully benefit from opportunities in the digital space, it is important that policymakers are aware of the underlying challenges and make prudent decisions from the available options.

The document states that the pace of digital India needs to be accelerated through a facilitative ecosystem to spur digital innovation within the country.

“This document seeks to achieve this goal through a multi-pronged approach, including the following: creating a facilitative regulatory environment for leveraging access to data, building better understanding of real and financial flows for future innovation by promoting the use of RuPay, creating a level playing field for foreign and domestic players in the Indian market by addressing some of the challenges confronting domestic players especially start-ups, addressing non-competitive practices and stimulating the participation of micro, small and medium enterprises in the digital economy.”

The draft of the policy addresses predatory pricing by imposing restrictions on e-commerce marketplaces to not directly or indirectly influence the price of sale of goods and services. This will also be extended to group companies of the e-commerce marketplace.

“A sunset clause, which defines the maximum duration of differential pricing strategies (such as deep discounts) that are implemented by e-commerce platforms to attract consumers, would be introduced,” the document states.

The draft policy also allows for a hybrid marketplace model by allowing limited inventory-based B2C model for goods that are 100% made in India.

Data storage

As per the draft policy, all data generated by users in India from various sources including e-commerce platforms, social media, search engines, etc should be stored within the country. This also includes community data collected by IoT devices in the public space.


After the Walmart-Flipkart deal faced major criticism from trader bodies, the draft policy calls for the Competition Commission of India to consider amending its thresholds and mandatorily examine major mergers and acquisitions, especially those that are touted to cause major disruption.

To ensure there is a level-playing field among domestic players, the draft policy looks to ensure that foreign websites involved in e-commerce transactions from India will also follow the same rules as the domestic companies.

Consumer protection

The draft policy also mandates that e-commerce companies fully disclose to consumers the purpose and use of data collected and the main features of their terms and conditions in a ‘simplified and an easily understandable form’ on their websites.

The government has also called for the establishment of an authority called the ‘Central Consumer Protection Authority (CCPA)’ to act as the nodal agency for intra-government coordination, to provide a platform for e-commerce operators for complaints regarding fraudulent activities and provide a forum for consumers to register unresolved complaints, among others.

Finally, the policy calls for a single legislation to address all aspects of e-commerce to be enacted and a single regulator to be set up to addressing the legal fragmentation seen across the various laws governing the e-commerce sector, viz. the Information Technology Act, 2000, the consumer protection laws, and other relevant legislations/ rules and ensuring uniformity in definition of the various e-commerce players and levels of obligation imposed on them.

The regulator will also look into issues regarding FDI implementation, consumer protection, full disclosure by e-commerce entities of purpose and intent etc., among others.

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