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Amid criticism, Government relook at draft rules for e-commerce

Facing a pushback from not solely the business but in addition some sections of the federal government, the Department of Consumer Affairs is learnt to be revisiting some provisions pertaining to definitions akin to ‘related party’ and ‘e-commerce entity’ proposed within the draft e-commerce guidelines it revealed in June, a number of sources concerned within the train have instructed The Indian Express.

The most important criticism from throughout the authorities is said to the notion of “overreach” by the Consumer Affairs Department — venturing into areas the place different departments such because the Department for Promotion of Industry and Internal Trade (DPIIT) and the Ministry of Electronics & Information Technology (MeitY) are already working.

Several contradictions within the draft guidelines which have triggered confusion amongst sectoral gamers have additionally been flagged, together with some provisions that run opposite to the principles governing the sector issued earlier by the DPIIT, officers mentioned.

Among the considerations raised by the business, the “broad definition” of ‘related party’ has been flagged — as one “that can potentially include all entities such as those involved in logistics, any joint ventures, etc.”, thereby vastly increasing the remit of the brand new guidelines.

“The definition of related party certainly needs some more clarity, otherwise it will be difficult not only for foreign players like Amazon and Flipkart, but even homegrown companies like Tata and Reliance to have their various brands such as 1mg, Netmeds, Urban Ladder, Milkbasket, etc. sell on their super-apps,” a Delhi-based retail govt mentioned on situation of anonymity. There was broad consensus within the business over this situation, the chief mentioned.

The govt gave the instance of the three way partnership between the Tata Group and Starbucks, which might be thought of a associated celebration underneath the proposed provisions, and wouldn’t be capable of promote merchandise on a Tata super-app.

Rules in final levels of notification
The draft e-commerce guidelines have been introduced on June 21, and invited feedback from stakeholders by July 6. However, a number of contradictions flagged by the business had prompted the Consumer Affairs Department to increase the date to July 21. Stakeholder views have been acquired, and the division is within the remaining levels of notifying the principles governing the sector.

The draft guidelines say each e-commerce market should make sure that nothing is completed by associated events or related enterprises that the e-commerce entity itself can’t do. Sources mentioned the provisions is perhaps modified to have sure exclusions within the definition to accommodate these considerations.

Also, it has been highlighted that in some circumstances, provisions akin to fall-back legal responsibility is counter-effective to the DPIIT’s coverage for overseas funding of e-commerce corporations that disallows these companies from having management over their stock.

Industry gamers have argued that on the one hand the FDI coverage prohibits corporations akin to Amazon and Flipkart from having management over the stock offered on their platforms, whereas on the opposite, the e-commerce guidelines of the Consumer Affairs Department holds these platforms liable in case a vendor fails to ship items or companies as a consequence of negligent conduct, which causes loss to the shopper.

“Provisions like fall-back liability are antithetical to the way e-commerce business models have evolved and they are even in contravention of the existing rules,” a senior business official mentioned.

An e-mail question despatched to the Consumer Affairs Ministry looking for feedback on the difficulty didn’t elicit a response.

The cross-indexing of guidelines governing the e-commerce sector amongst varied authorities departments has additionally been flagged. The most important intervention has come from the Niti Aayog, which is learnt to have flagged in an workplace memorandum that most of the provisions have been “beyond the realm” of shopper safety.

Some of the proposed provisions like having a compliance officer, adherence to regulation enforcement requests, and so forth., observe within the footsteps of the Information Technology (Intermediary) Rules, 2021 issued by MeitY. These IT guidelines are dealing with authorized challenges in a number of courts, together with the Delhi High Court, Bombay High Court, and Karnataka High Court.

An official of a Bengaluru-based e-commerce firm famous that the noise over the FDI coverage of the DPIIT, which was seen within the US as India including non-tariff commerce boundaries, might have been a purpose why the federal government determined to route the brand new e-commerce guidelines via the Consumer Affairs Department.

The Confederation of All India Traders (CAIT), responding to Niti Aayog’s letter questioning the position of the Consumer Affairs Ministry within the formulation of those guidelines, wrote to Minister of Commerce & Industry and Consumer Affairs, Food and Public Distribution Piyush Goyal on Monday: “As expected, [a] few organisations in the country are bent upon creating roadblocks to ensure that reforms are derailed…it is highly painful to observe that Niti Aayog without realising as to why the e-commerce rules are necessary joined the chorus criticising the rules.”

Sector consultants have raised considerations over a number of the provisions being in opposition to the pursuits of shoppers. “These rules appear to blatantly limit consumer choices further through provisions such as blanket ban on flash sales, etc. despite the regulations being routed through the Ministry that is mandated to uphold consumer rights,” a Gurgaon-based retail sector analyst mentioned. Doonited

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