Tech giants put India plans on hold, seek clarity on e-commerce policies

The proposed e-commerce policy is expected to dominate the headlines after May 23

Global technology majors have put on hold their investment plans for India as they wait for a new government to clear the air around a host of issues such as the e-commerce policy and data protection laws, people in the know said.

  

Public policy teams of Amazon, Flipkart, Facebook, and TikTok, among others, are planning to meet senior officials of the Department for Promotion of Industry and Internal Trade (DPIIT), finance ministry, and information technology ministry after the formation of the government, to understand its stance. 

“A lot of questions remain unanswered. The e-commerce policy talks more about data protection. The changes companies had to make due to the tweaks in the FDI (foreign direct investment) policy are still affecting businesses. We need to understand what exactly the new government would do on these issues,” said a senior public policy advisor to one of the biggest e-commerce companies in India. These companies are concerned about data protection laws, which make it mandatory for them to store all data of Indian users onshore. “The problem is that the government is not even allowing us to process the data offshore. If that stays, it would affect businesses a lot,” added the advisor.

Many companies have also deferred their investment plans. “We need to know what the policies are. There is too much to and fro happening on that front. Till the time we have crystal clear policies, investment might not happen,” said a senior vice-president of a technology firm.

The proposed e-commerce policy, aimed at streamlining and regulating the digital business ecosystem, is expected to dominate the headlines after May 23. The new government will have to navigate through the differences between public and industry opinion regarding the policy that has diverged despite a long stakeholder consultation period.

“While the government has already held detailed discussions with technology companies, law firms, and industry associations over myriad aspects of the policy, only provisions regarding data flows and foreign investment have been incorporated into the policy. We don't know what happened to the other issues such as e-commerce norms, trademark rights, and the extent to which online services will come under the policy hammer," a senior functionary of the Confederation of Indian Industry said.

Meanwhile, civil society bodies and interest groups have also written to DPIIT Secretary Ramesh Abhishek, expressing concerns over the consultation process.

In a letter sent to Abhishek earlier this week, 13 such groups have called for publishing all comments received by the DPIIT as part of the public consultation, to provide an opportunity to all stakeholders to submit counter-comments. The letter reviewed by Business Standard points out this is the norm in other government consultations on policies of public interest. 

"Prior public consultations conducted by other government bodies such as the Telecom Regulatory Authority of India and the Ministry of Electronics and Information Technology have maintained a higher level of transparency by publishing the comments received,” it said. The letter, co-signed by more than 10 academics, has also requested more discussions on issues such as tax, competition issues, intellectual property and intermediary liability.

However, the issue of data management is expected to be most contentious. “The overarching approach to data management, which mis-classifies data as a national asset, deprives individuals of autonomy over and consent for their personal data, a protected right in India,” the Asia Internet Coalition has said, which counts Apple, Facebook, Google and LinkedIn as its members. 

Policy concern

• Global firms unsure of whether and how to shift consumer data from offshore to local servers
• Investment plans remain on hold due to uncertainties about tax liabilities
• Tech biggies say classifying data as 'national asset' is against laws protecting data privacy
• Questions over e-commerce norms, copyright issues and regulation of online services remain