India introduces draft e-commerce policy to protect buyer’s data

The Indian government has reportedly issued a draft national e-commerce policy to regulate cross-border data flow, prevent privacy and counterfeiting, and mandates all e-commerce retailers to operate a locally registered business entity.

As per trusted sources, the draft policy comes post the government discarded a previous version in September 2018 due to opposition from some online retailers. The new version also strengthens rules pertaining to the foreign direct investment for e-commerce companies.

Sources claim that the new policy restricts the cross-border flow of important data of Indian users gathered by e-commerce platforms and social networking sites. This step is also similar to 2018’s draft Personal Data Protection Bill and the Reserve Bank of India’s directive to payment firms like Visa and MasterCard to place all data locally, cited sources.

According to credible sources, the new draft policy calls for the development of more data storage facilities, server farms, and data centers in India. The policy also helped create a legal and technological framework to offer the basis for restricting cross-border data flow, reported sources.

Reportedly, the new draft focuses on six key areas namely data, e-commerce marketplaces, infrastructure development, domestic digital economy, regulatory issues, and export promotion. Furthermore, the draft identifies e-commerce as an interdisciplinary subject falling under the ambit of several ministries and state governments. The draft suggests formulating a Standing Group of Secretaries on e-commerce to manage inter-departmental issues, cited sources familiar with the policy.  Additionally, the policy also plans to restrict all parcels except for lifesaving drugs under the gifting route being employed by international e-commerce firms to circumvent taxes in India. On the issue of taxation, the policy draws from the IT intermediaries’ guidelines and proposes e-commerce companies active in India to have a significant local presence. Moreover, the draft policy received mixed reactions from stakeholders, while Indian e-commerce companies like Snapdeal welcomed the policy, reported sources.