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Draft e-commerce policy inimical to 1-trillion dollar digital economy, says IAMAI

The Internet and Mobile Association of India has expressed its unhappiness with the draft National E-commerce Policy. It maintains that the policy may be inimical to the government’s efforts of building a trillion-dollar digital economy by 2022. By artificially curbing cross-border data flow, mandating data localization, extending the definition of e-commerce to include all digital services like digital advertising and online streaming and possibly imposing FDI restrictions (currently restricted to product e-commerce only under the Consolidated FDI Policy) on all digital services, the draft policy is likely to severely bring down FDI flows in the sector, which is the backbone to building a trillion-dollar digital economy.

The Association also observed that the process of making the policy itself was less than inclusive and open as compared to more recent national-level policies, such as the National Digital Communications Policy 2018.

IAMAI expressed difference in opinion with the draft policy’s understanding of data is the new oil. IAMAI stated that unlike non-renewable natural resources like oil or coal, data is non-exclusive, non-exhaustive, and easily replicable. Furthermore, unlike the other natural resources, processing of data does not deplete the stock of data and only creates further data.

The association also points out that the provisions of this policy contradict the underlying principles of the draft Personal Data Protection Bill (PDP) on multiple grounds: the PDP is restricted to individual data and keeps anonymized data outside its ambit while the e-commerce policy covers all data; the PDP recognizes individuals as ultimate owners of their data and even the state is at best a fiduciary, while the e-commerce bill considers state as the ultimate owner of data; the PDP recognizes consumer’s consent while the e-commerce bill completely negates it; and the PDP allows cross-border sharing of data with limitations based on category of data while the e-commerce bill suggests blanket ban. IAMAI highlights that the PDP was based on the principles of privacy as fundamental right, as laid by the Supreme Court in the Puttaswamy judgment.

IAMAI stated that going ahead, the processes and principles laid out in the Association’s submission be followed in order to arrive at an effective national e-commerce policy.

In the meantime, the Department for Promotion of Industry and Internal Trade (DPIIT) has started analyzing comments and suggestions received from stakeholders on the draft national e-commerce policy. The 41-page draft talks about six broad issues of the e-commerce ecosystem – data, infrastructure development, e-commerce marketplaces, regulatory issues, stimulating domestic digital economy, and export promotion through e-commerce.

The process of formulation of the final policy may wait till the new government assumes charge as it requires the approval of the union cabinet.

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