Needed, A Light-Touch Policy For E-commerce

The need of the hour is an ecosystem for e-commerce to flourish, not over-regulation.

- Amarjeet Singh

THE DRAFT NATIONAL E-COMMERCE Policy (NEP) is an effort by the government to create a legislature and policy framework around the e-commerce ecosystem. The core objective of the formulation of NEP seems to be threefold: (a) provide a level playing field to Indian e-commerce players without violating the international trade agreement in comparison to global behemoths; (b) develop a legally conducive environment to attract foreign capital; and (c) enhance consumer and data protection. Against this backdrop, the key demand of the e-commerce industry was an uncluttered regulation.

The NEP, in its current form, suggests many steps to achieve the above-mentioned objectives. But it predominantly seems to be a step towards an overarching legislation to govern the e-commerce sector. One needs to remember that the concept of ‘ease of doing business’ is not just for foreign investors, but is equally applicable to homegrown entrepreneurs.

At a time when the e-commerce sector is on a growth trajectory, and we claim India to be one of the most open economies in the world (with only a few sectors concerning national security falling under the government approval route), the effort of creating an ‘India first’ agenda may prove to be counterproductive and deter inflow of foreign capital. Regulators need to be conscious of the fact that the e-commerce-and-startup ecosystem in India is heavily dependent on foreign funds. Local investors in India still like to put their money in conventional businesses, and are not able to understand and appreciate the valuation paradigms of new e-commerce businesses.