A smart businessman once said, data is the new oil.
And then he said it again, and again and again. Till the phrase took a life of its own. A sort of opportunistic chant in people’s imagination, in corporate boardrooms, the bureaucracy and government corridors. Till it found its place in the Draft National Policy Framework for electronic commerce in India. Or simply put, a policy document that has been in the works for the last few months to regulate e-commerce.
Earlier this week, the draft e-commerce policy document was leaked. The Ken has a copy. Its contents, only to be read as recommendations, make for important reading. Below are salient pointers from the 19-page document. This part is dense, but read through, so you are prepared for what’s coming next.
- We don’t know what’s electronic commerce. So a definition will be adopted for policy-making.
- Data is oil. So steps will be taken to incentivise data storage in India. One way could be tax benefits, rebates in custom duties.
- Data generated by users in India from all sources, whether they are shopping to social media to search engines, will be stored exclusively in India. The government would have access to this data for national security and public policy objectives, subject to privacy, consent, etc.
- Enhancing the usage and visibility of an obscure government-owned payment system called RuPay by mandating its listing as an option in e-commerce transactions. Right now, RuPay is looked at as a poor man’s card.
- Adopting artificial intelligence (AI) like a biometric-based information authentication technology for payments.
- Creation of a Social Credit Database through public-private partnership to facilitate digital lending.
- Establishing an e-commerce retail platform specifically for small & medium enterprises (MSMEs), vendors and suppliers. Addressing their issues of finance to help them to sell online. Incentivising online platforms to get more MSMEs on board. Helping MSMEs get data analytics amongst other things to sell online.
- Giving more teeth to the Enforcement Directorate to go after violators of Press Note 3. The note talks about the regulation of foreign investment in e-commerce.
- Amend Companies Act to help founders have control over their e-commerce companies despite having a minority stake, through differential voting rights.
- Prohibition of bulk purchases of electronics, white goods, branded fashion goods by related party sellers. This, in turn, to stop price distortions in the market.
- Restriction on e-commerce marketplaces to influence the pricing of products sold on their platforms.
- Restriction on deep discounts, especially the duration in which e-commerce marketplaces can offer deep discounts.
- Create a level playing field for foreign and domestic e-commerce companies.
- Give more teeth to the Competition Commission of India (CCI) to change rules and stop competition distorting mergers and acquisitions from happening.