India: government departments to consider potentially extensive ecommerce regulation

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, The Financial Express reports.

All ministries involved have been asked to express their point of view on the proposal before it is taken up by the CoS, considered the most important decision making body after the Union Cabinet. The department of consumer affairs argues in its draft note that the ecommerce sectors operations were too complex to be under the purview of any single ministry and therefore a clear demarcation of the activities of ecommerce should be handled by different departments, according to The Economic Times.

According to the proposal made by the consumer affairs, the department of revenue will handle taxation related issues, while the Reserve Bank of India should look into banking and foreign exchange issues. The consumer protection issues will be taken care of by the consumer affairs department, while foreign investment and trade policy will be under the purview of the commerce and industry ministry.

The ministry of IT and telecom will handle data protection, cyber security and issues related to registration of server and websites, while competition policy related matters will fall within the corporate affairs ministry’s jurisdiction.

Criminal frauds will be looked into by the finance, corporate and home ministries. A database on the sector will be maintained by the statistics department, while the information and broadcasting ministry will take care of advertising norms and related matters.

The consumer affairs department has asked for more clarity in the definition of ‘internal trade’. The department said although it can take care of consumer protection issues and grievances, ecommerce also has several other issues including tax evasion, online fraud, predatory business practices, data privacy/cyber security and FDI.

Despite the notable growth, the ecommerce sector in India is still just 0.5% of the overall retail industry. 2015 is expected to be more promising not only for the consumers, but also for the entrepreneurs in India, with average annual spending on online purchases projected to increase by 67% to Rs 10,000 from Rs 6,000 per person, according to Associated Chambers of Commerce and Industry of India (Assocham).

Check out our Cross-border Ecommerce Research section here for more info on specific ecommerce facts and figures, preferred payment methods, risk and fraud, as well as ecommerce legislation and regulation in India.