Government relook at draft rules for e-commerce

The draft e-commerce rules were announced on June 21, and invited comments from stakeholders by July 6. However, multiple contradictions flagged by the industry had prompted the Consumer Affairs Department to extend the date to July 21. Stakeholder views have been received, and the department is in the final stages of notifying the rules governing the sector.

There is huge pushback from not only the industry but also some sections of the government, the Department of Consumer Affairs is learnt to be revisiting some provisions pertaining to definitions such as ‘related party’ and ‘e-commerce entity’ proposed in the draft e-commerce rules it published in June.

Several contradictions in the draft rules that have triggered confusion among sectoral players have also been flagged, including some provisions that run contrary to the rules governing the sector issued earlier by the DPIIT, officials said.

The most significant criticism from within the government is related to the perception of “overreach” by the Consumer Affairs Department - venturing into areas where other departments such as the Department for Promotion of Industry and Internal Trade (DPIIT) and the Ministry of Electronics & Information Technology (MeitY) are already working.

The definition of related party certainly needs some more clarity, otherwise it will be difficult not only for foreign players like Amazon and Flipkart, but even homegrown companies like Tata and Reliance to have their various brands such as 1mg, Netmeds, Urban Ladder, Milkbasket, etc. sell on their super-apps,” a Delhi-based retail executive said on condition of anonymity. There was broad consensus in the industry over this issue, the executive said.

The draft rules say every e-commerce marketplace must ensure that nothing is done by related parties or associated enterprises that the e-commerce entity itself cannot do. Sources said the provisions might be changed to have certain exclusions in the definition to accommodate these concerns.

The Confederation of All India Traders (CAIT), responding to Niti Aayog’s letter questioning the role of the Consumer Affairs Ministry in the formulation of these rules, wrote to Minister of Commerce & Industry and Consumer Affairs, Food and Public Distribution Piyush Goyal on Monday: “As expected, few organisations in the country are bent upon creating roadblocks to ensure that reforms are derailed and it is highly painful to observe that Niti Aayog without realising as to why the e-commerce rules are necessary joined the chorus criticising the rules.”