India's PMO to look into concerns over e-com policy draft

The Indian Prime Minister’s Office (PMO) has reportedly stepped in to look into concerns raised by sections of the industry as well as the government on the proposed e-commerce policy drafted by the commerce ministry.

The policy may see a number of changes. The PMO convened a meeting of officials from key ministries and departments on the issue recently.

The ministries included those of commerce, industry, consumer affairs, information technology and finance, several Indian business dailies reported.

NITI Aayog chief executive officer Amitabh Kant had recently said that the government should not get into the market by looking at micro issues of discounts and pricing. The policy draft mentioned introducing a sunset clause for offering deep discounts to customers.

The PMO is likely to take a measured stance on the issue, while balancing its aim to attract foreign direct investment along with keeping the interest of traders in mind.

Another controversial suggestion is allowing foreign equity of up to 49 per cent in a limited inventory-based business-to-consumer (B2C) model.

Despite a proposed caveat that the platforms should be controlled by Indian management, the domestic industry has opposed the suggestion on the ground that it contradicts the government’s stated intent to strengthen Press Note 3, which bars any foreign direct investment in inventory-based online retail.

Industry bodies have also objected to data localisation proposals, according to which data generated by users in India from various sources, including e-commerce platforms, social media and search engines, should be stored exclusively in India.

India’s e-commerce market, currently valued at about $27 billion, is one of the fastest growing in the world.