AN ANALYSIS OF THE E-COMMERCE POLICY.

The Draft National E-Commerce Policy, issued by the Department for Promotion of Industry
and Internal Trade (“DPIIT”) is a highly appreciated move in the era of the exponential
growth of the E-Commerce Industry in the world, especially in India. It was issued on 23rd
February 2019. The Draft Policy comprehensively covers various dimensions of E-
Commerce, including data, intellectual property, consumer protection and competition; while
addressing the interests and concerns of the industry.
There is much to be lauded about this document. On the international forum, this Draft Policy
is the first exclusive E-Commerce Policy for India; made along similar lines of the
legislations and policies laid down in China and the United States. This makes India a front-
runner in the world of advanced E-Commerce legislation.
The government’s schemes in the field of E-Commerce, like Digital India, Make in India, and
Startup India, receive a significant boost with this Draft Policy. The introduction of the norms
for consumer protection; recognition of the importance of data storage, data privacy, and data
safety; the grant of infrastructure status to data centres and server farms; the integration of
systems to track imports into India; and the introduction of anti-counterfeiting and anti-piracy
measures are the highlights of this policy. When it is read with the updated industrial policy,
it reflects the underlying brick-and-mortar economy.
However, in the enthusiastic effort of the government to address all these aspects of E-
Commerce, the Draft Policy has become ambiguous in its interpretation; mostly
questioning the intended nature of the policy – whether it is a general internet policy, or
specifically addresses E-Commerce. The stakeholders, which include the industry, its
associations, and the independent policy community have raised concerns which arise
from various areas; such as the definition of E-Commerce, ownership of data, excessive
liability on E-Commerce platforms, shortcomings in the realm of consumer protection,
and the lack of clarity on the regulations and its implementation.
This draft complies with the recommendations provided by the Sri Krishna Committee
with regards to data privacy and data storage in India. For example, the policy mandates
E-Commerce companies to store user data in India within a period of two years, which is
deemed to be a definite clause in the upcoming law on data privacy in India. The data
that is being discussed in this context includes community data collected by Internet of
Things (IoT) devices in public spaces and data generated by users in India through e-
commerce platforms, social media, search engines, etc. The European Union’s General

Data Protection Regulation Law also mandates online platforms to locally store user
information. The need for such restrictions arises from the looming threat of cyber-
crimes in the digital age, as extra-terrestrial laws that deal with data protection are
extremely intricate and complex. The process of seeking data from other countries is also
quite time-consuming, with most of it going into abiding by the other country’s judicial
and legal processes.
The aspect of the right to privacy has also risen many concerns. The Draft Policy neither
discusses the protection of user data privacy nor provides any framework that regulates the
government’s access to a user’s personal data. Additionally, the E-Commerce companies are
unclear about the kind of data that can be transferred outside India in order to process their
functioning. The mandatory rule for local storage of data has forced many companies based
in India to use cloud-based storage services like Amazon Web Services (AWS), thereby
effecting their operational cost and efficiency. This appears as a setback to the E-Commerce
sectors, incurring higher costs in order to set new data centres in India. It is forecasted to last
for at least two to three years. Here, the government must take the initiative to clearly define
the data that must be mandatorily stored in India, ideally limiting it to pre-defined security
and personal data. The storage of all the forms of data mentioned in the recommendation by
the Sri Krishna Committee.
The World Trade Organisation (WTO) negotiations on E-Commerce that are currently
underway are predominantly with developed nations. However, India is not a part of it.
Therefore, for the past five years, it has been severely criticised for not addressing or
incorporating the concerns and interests of developing countries. A large influx of foreign
investments has been observed in the domain of E-Commerce, with Alibaba Group investing
approximately $1.8 billion in e-Commerce companies in India and Walmart investing $16
billion in Flipkart recently. This, along with this new Draft E-Commerce Policy, can make
India a potential key influencer in the global domain of E-Commerce. However, these draft
policies must be well-drafted and well-implemented. The new policy can also help India
spearhead the global discussion on E-Commerce, as well as act as a model for E-Commerce
policies of those countries who are not a part of the WTO negotiations.

–By Ashray Vishnu,
School of Law, Christ University, Bangalore