In the works: National e-commerce policy to script arm's-length rulebook

To apply to all platforms engaged in buying and selling, including social media

A national e-commerce policy, which has been in the works for close to three years, will direct e-tailers to be ‘fair’ and ‘non-discriminatory’ while providing cashbacks or reward offers to consumers, people aware of the matter told Business Standard.

The policy — applicable to all digital and electronic platforms engaged in buying and selling of goods and services, including television shopping channels, web pages, and social media — will also ensure that marketplace firms don’t influence prices of products listed on their platforms, following arm’s length principle.

E-commerce companies will also have to appoint officers to ensure compliance with domestic laws and address all complaints in a fair and a time-bound manner, officials said.

The Department for Promotion of Industry and Internal Trade (DPIIT) has circulated the latest draft policy to other government departments and ministries for consultation. Earlier, at least two drafts prepared by the DPIIT could not become policy after some government departments opposed certain clauses.

Officials indicated that no marketplace can have any control over the products sold on the platform. Also, such firms cannot directly or indirectly sell their products to vendors registered on their platform. They also cannot mandate a vendor to sell products exclusively on their platform.

The proposed policy is yet another attempt by the government to regulate India’s growing e-commerce sector, make marketplaces more accountable and provide a level playing field for traditional offline traders. Domestic traders’ bodies have been protesting against deep discounts by foreign-funded e-tailers. They have also raised a red flag against preferential treatment towards some sellers and indirectly following the inventory model of e-commerce.

Last June, the consumer affairs ministry had proposed another set of guidelines for e-tailers including ban on flash sales or sale of goods at significantly reduced prices. The guidelines also gave preference to locally-produced goods. Industry representatives and government departments were critical of the guidelines, arguing that investor sentiment would be hurt. 

The consumer affairs ministry is preparing a revised and perhaps a more lenient draft.

E-tailers will also have to provide complete information of products, including its description, delivery, prices; expiry, refund, exchange, warranty, country of origin at a pre-purchase stage so that buyers are able to make an informed purchase decision.

Sellers on the e-commerce platforms will also have to mention their physical address and ensure that product pricing is fair and non-discriminatory. The government will have the authority to ask any e-commerce company to produce information that may be required for development of the sector, according to the policy that’s being finalised.