Upcoming draft eCommerce policy and rules could be more relaxed

Upcoming draft eCommerce policy and rules could be more relaxed

The Indian eCommerce sector is poised to face a new set of changes. But if you are a small business owner, you have minimal reasons to worry. The government is soon going to release a new draft eCommerce policy and rules that would revolve around deep discounts, unfair business practices and protecting the interests of small eCommerce businesses.

Here’s a quick run-through of what the drafts would mean and how can they affect your small online business.

Indian eCommerce policy draft – A timeline 

In 2019, the Department for Promotion of Industry and Internal Trade (DPIIT) had released a Draft National eCommerce Policy.  It contained proposals to set up a new regulator that would oversee eCommerce and related functions in India. It aimed at creating jobs, encouraging rural production and exporting homemade goods.

In 2020, the government released a fresh draft that had some interesting proposals that seemed to favour small businesses that were gearing up to go online.

Read our highlights to get a deeper understanding of these eCommerce proposals.

In July, the Consumer Protection (eCommerce) Rules, 2020, came into force.

In 2021 June, the government had released proposals to the Consumer protection (eCommerce) Rules, that would ban flash sales and prohibit unfair pricing of goods and services on eCommerce platforms amongst many other proposals.

Sounds confusing? Well, it has been for the eCommerce industry and all major stakeholders for the past two years. The simplest way to understand the revisions and the existing policies would be – eCommerce is regulated by the Department for Promotion of Industry and Internal Trade (DPIIT), but the amended rules are formulated by the Ministry of Consumer Affairs.

In 2021 December, there have been fresh reports that say that the Government is going to release an eCommerce policy draft as well as eCommerce rules as revisions.

The draft eCommerce policy would lay down rules for all the gaps in the existing digital commerce policies, and also have comprehensive guidelines for the eCommerce space.

Why is it a draft? 

Amongst all these changes and revisions, the question does come up – why are all these revisions called drafts?

Well, the eCommerce space has seen an explosion in its revenues relatively recently. This is new territory not only for major stakeholders but also for the government. The rapid acceleration of digitization and a shift to online sales has not been at the same pace as the laws governing this space.

The government hence is taking extra care to implement policies and laws that can have a holistic impact on the growth of the Indian economy and also protect the interests of small players. These proposals are open to public debate, industry comment and critical discussion so that all stakeholders can be relatively satisfied with the outcome.

 

Draft eCommerce Policy
Economic Times

Major concerns that the government may address in the new eCommerce policy draft: 

1. Regulations on unfair pricing 

The 2021 draft released in June proposed to lay down rules so that no eCommerce entity could “manipulate the price of the goods or services offered on its platform in such a manner as to gain unreasonable profit by imposing on consumers any unjustified price having regard to the prevailing market conditions.”

Analysts suggest that this proposal would stay in the new draft. This would prove to be beneficial for small business owners who often have to fight with products on large marketplaces.

Online retailers also cannot utilise biased algorithms that unfairly show the products of certain favoured sellers.

2. Reversal of proposed mandatory registration of every eCommerce entity which intends to operate in India with the DPIIT

The beauty of eCommerce lays in the low barriers of entry. Mandatory registrations for every single seller would create entry barriers and also involve them in unnecessary legal hassles. Many small business owners often start a side project based on their passion. Constant compliance with legalities and registration measures can act as a deterrent for growing home businesses and DTC brands.

If successful, the proposed reversal would keep eCommerce platforms acccessible and democractic for all budding entrepreneurs.

3. Reversal of ban on flash sales and deep discounting.

The lack of clarity in legal proceedings can often affect small businesses unfairly. Sometimes, it can become difficult to confirm whether the discounts provided by small businesses actually flout the law or not.

Small online business owners often depend upon festive season discounts and it forms a large chunk of their revenue.

A reversal would encourage home businesses and small online store owners to use marketing strategies like personalised discounts and sales.

There is still time for the final revisions to come out. However, throughout all the revisions, the priorities of small Indian online retailers have been at the forefront. The draft will certainly give structure to the legal complexities surrounding eCommerce transactions. It also promises to plug in existing gaps in the digital commerce industry.

Realise your entrepreneurial dreams with Instamojo 

This is a golden time for the Indian eCommerce space. If you have always dreamt of having your own online store, now is the time to fulfil these dreams. The government, industry bodies and consumer sentiment is all on your side. The Indian consumer is more aware of what they are buying and their first priority is going to be supporting an Indian homegrown small brand.

So what are you waiting for? Start your own independent online business for free today and watch it scale to new heights!

 

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