Govt yet to decide on regulatory body to monitor e-commerce: Nirmala Sitharaman

Nirmala Sitharaman

In the midst of taking e-commerce and startup to the next level and allowing all the possible armour to them, the statement from ministry of state for commerce and industry, Nirmala Sitharaman came as surprise to many.

While addressing the issue raised by members of opposition in the Rajya Sabha, she said, “The government has not reached a decision on setting up a central regulatory body to monitor e-commerce companies as of now.”

The queries were based on representation made by the All India Online Vendors Association (AIOVA)), an association of medium and large sellers across online marketplaces.

According to Sitharaman, “E-commerce activities are governed by a number of Regulations Acts.” She also added that, “no decision has been taken by the government for setting up a regulator for e-commerce.”

It is said that e-commerce activities are very complex and diverse to be kept under the jurisdiction of a single department or ministry, the department of consumer affairs has moved a note for the consideration of the committee of secretaries (CoS) and sought approval for a proposal for clear allocation of business rules with respect to the sector.

There is no list of genuine/licensed online sellers, consumers do not have any mechanism to distinguish between genuine and fraudulent e-commerce players. Besides, many of the sellers also do not provide proper contact information.

Consumers have been confused by different operating procedures followed by online traders for placing orders and purchasing it. There are several complaints related to delivery of services and products as well as in cancelling orders and getting refunds for returned items.

In response to a related question, Sitharaman acknowledged that the government had received communication from AIOVA to resolve issues related to payment settlement for online sellers.”No such data (on quantum of business done through e-commerce sites in the country) is centrally maintained,” the statement said.

Some issues highlighted in recent times:

  • Retailers Associations of India (RAI) and the All India Footwear Manufacturers and Retailers Association, had approached the Delhi high court arguing that online retail companies have gained an undue advantage by being allowing access to FDI through which they are able to provide deep discounts that traditional retailers cannot match.
  • Most small sellers are not GST complaint yet. Also, there are many ambiguities about the law.
  • As per present retail policy, the government does not allow e-commerce companies to directly sell to customers. But under the umbrella of the marketplace model, such online companies are directly selling to customers, violating rules.
  • E-commerce portals have to display MRP and expiry date from 2018 because they are selling products near to their expiry or best-before dates.

According to RedSeer Consulting, India’s e-commerce sector was estimated to be $14.5 billion in 2016. Though this is small compared to India’s total retail spending of $750 billion, online commerce is expected to grow rapidly in coming years. Thus the above developments need to be addressed properly.

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