Draft e-comm policy: The E-commerce Council of India bats for strict implementation of FDI laws

Raising the India pitch, The E-commerce Council of India (TECI) has asked for incorporation and effective implementation of FDI laws governing marketplaces in the national e-commerce policy.

All cross-border e-commerce sites selling to consumers in India should operate through a registered business entity in India, with a physical presence in India and conduct business operations in compliance with all applicable Indian laws,  the lobby for Indian e-commerce companies said in a review on the draft e-commerce policy.

Clearly aimed at Amazon and Flipkart, which are controlled by the foreign entities, TECI has suggested that categorical measures be included in the e-commerce policy to ensure that marketplaces do not act as sellers on their own platforms, either directly or indirectly.

It has proposed that an entity operating/owning an online marketplace should not permit any entity related to it, directly or indirectly, to buy or sell.

All e-commerce firms operating in the country had time till March 31 to submit their feedback to the draft e-commerce policy of the government of India. The draft policy addresses six broad issues of e-commerce in the country – data, infrastructure development, e-commerce marketplaces, regulatory issues, stimulating domestic digital economy and export promotion through e-commerce.

Several e-commerce companies, including Snapdeal, ShopClues, Shop101, and UrbanClap, had announced the launch of a trade association TECI last month. The aim was to provide policy advocacy as well as encourage best practices in the Indian e-commerce industry with respect to data privacy, logistics, payments, and other issues.

Flyrobe, Fynd along with online brands like Mamaearth, Superbottoms and Azah and Bewakoof are also members of TECI.

In its submission, TECI has reiterated that the role of the marketplaces is distinct from that of the sellers and the brands. It added, as per FDI guidelines, the warranties and guarantees are the responsibility of the seller, and these should not be shifted to the marketplaces, which neither own nor sell the goods.

It also opposed the proposal for TM owners to give approval for online sales, as this will become a tool for trade channel control. Such an obligation will distort the field against small sellers and will impede the growth of the independent sellers.