India’s draft e-commerce rules, which have stirred up quite a storm at home, has also invited skepticism from abroad. The Australian government has formally written to India’s Department of Consumer Affairs saying that the new rules would “impose extensive extraterritorial obligations on foreign e-commerce entities operating in India.”
The e-commerce rules, published on June 28, are aimed at reigning in the booming sector. For instance, the rules would impose a “fall-back liability” on the companies where they will be held liable if a seller is unable to deliver an order. Companies would be barred from manipulating search results, and restrict data-sharing to third parties without the explicit consent of the consumer.
Trickier for the companies would be the clause requiring them to suggest indigenous products to a consumer that is viewing an imported product. The rules also seek to ask e-retailers to provide country-of-origin data for each product listed—a mammoth task for platforms like Flipkart and Amazon who house several products.
Both the Niti-Aayog and the Department for Promotion of Industry and Internal Trade (DPIIT) have red-flagged several provisions of the draft rules. The Indian Express reported to have obtained records under the Right to Information (RTI) Act, which quote the vice chairman of Niti Aayog, Rajiv Kumar, as saying that the rules “will severely harm Ease of Doing Business and impact small businesses”.
The rules must be re-examined not just for the “overreach” that Niti Aayog has also flagged, but for the clarity of their terms as well. In their present form, the rules are extremely vague, making it difficult to delineate their impact on consumers and the industry.
The communication by the Australian government, which is negotiating a trade pact with India, only add to the urgency. The proposed trade pact has a dedicated chapter on e-commerce.
Stakeholders have till July 21 to submit their comments, but it has been reported that the department is already re-examining some rules in light of the pushback that it has received.