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An inter-ministerial consultation is going on to frame an ecommerce policy that would help in providing a conducive environment for inclusive and harmonious growth of the sector, a top government official said.

Rajesh Kumar Singh, Secretary in the Department for Promotion of Industry and Internal Trade (DPIIT), mentioned that the policy’s objective is to align it with consumer protection rules rather than conflicting with them.

The policy’s primary goal is to formulate strategies that promote a conducive environment for the ecommerce sector’s inclusive and harmonious growth. This will be achieved through the implementation of a streamlined regulatory framework, facilitation of business operations, adoption of modern technologies, integration of supply chains, and enhancing exports through ecommerce.

Singh informed PTI that the policy is currently being developed through inter-ministerial consultations.

He emphasised that the consumer protection rules and the e-commerce policy will be separate but will remain compatible with each other. The policy will serve as a comprehensive framework in comparison to the e-commerce rules.

Regarding the demands from domestic retailers for clarification on foreign direct investment (FDI) in the e-commerce sector, the Secretary stated that the policy aims to address some of these concerns by ensuring more effective enforcement of the norms.

However, Singh clarified that there are no immediate plans to establish a regulator for the sector.

The Confederation of All Indian Traders (CAIT), a traders’ body, has called for the implementation of a robust e-commerce policy and the establishment of an empowered regulatory body. CAIT alleges that foreign online retailers are violating FDI norms and urges the government to take action against those engaged in malpractices.

Currently, FDI is permitted in the marketplace model of e-commerce but not in the inventory-based model. Companies involved in ecommerce are responsible for complying with FDI regulations, and violations are subject to penalties under the Foreign Exchange Management Act (FEMA).

The regulatory framework for the digital/ecommerce sector in India is still evolving and is governed by the Information Technology Act, Consumer Protection Act, FDI policy, and Competition Act. Additionally, proposals such as the Digital India Act and amendments to the competition law are under consideration by various ministries and departments to address the concerns of domestic retailers adequately.

The DPIIT is also working on a national retail trade policy, which is currently undergoing inter-ministerial consultation. The policy aims to provide general guidelines to create a favorable environment that fuels and streamlines the growth of the physical retail sector.