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Why entrepreneurs are wary of the new draft e-commerce policy

Raka Chakrawarti, an entrepreneur from Mumbai, is tensed as of late, not about her enterprise, which is booming, however over the guidelines of the Draft National e-Commerce Policy.

If the policy, drafted by the Department for Promotion of Industry and Internal Trade (DPIIT) and searching for stakeholder feedback, will get a go-ahead as it’s, Gourmetdelight, her bootstrapped on-line vendor of natural items, must certify and add critiques of all the merchandise her market sells.

She says her platform has almost 1,500 inventory maintaining models – from black garlic to trikaya child spinach – and certifying all of these would imply an extra pressure on her funds and small workforce. Then there are different questions she is searching for solutions to: what to do with the rising quantity of person information (the policy suggests the authorities has overarching rights over it); what’s the scope of the policy; what’s the definition of ecommerce and can the policy, by showing protectionist, preserve away overseas capital, thus far the life blood of the sector?

In 5 years, in accordance with Venture Intelligence, buyers have poured over $18 billion throughout 667 offers in India’s ecommerce market. This cash, principally from abroad, has allowed ecommerce startups to develop quick and likewise provide buyers a good-looking exit – like in the case of Walmart shopping for Flipkart.

Some of this momentum could also be misplaced, concern entrepreneurs, since the policy seems to take a protectionist method – by empowering home entrepreneurs, pushing Make in India and proposing to personal person information and deterring international buyers from betting on the potential of India’s ecommerce market.


Legal specialists and executives in ecommerce corporations really feel the draft policy is half-baked. While it makes some progress on defending home-grown small companies, the proposals about information possession and stricter high quality norms might make it exhausting for such companies to develop.

Ambareesh Murthy, CEO of furnishings retailer Pepperfry, says it is a draft that’s evolving and the intent might change over time. He is wary of the proposal to present authorities possession of, and subsequently management over, person information. While the authorities argues that information is a nationwide useful resource, executives really feel people ought to maintain final management over their private data.


While overseas company-owned Amazon and Flipkart have constructed their enterprise right here, newer entrants corresponding to Chinese upstarts will discover an India foray costlier, since the policy requires organising of an workplace right here to legally function. Critics additionally argue that whereas the policy begins with the proper intentions, it loses deal with the approach. They say the suggestions made throughout greater than 14,000 phrases are too broad, encompassing greater than the e-commerce business itself.

Putting collectively such an all-encompassing assertion is not proper, say policy specialists, because it includes not simply DPIIT but in addition different authorities our bodies and regulators, together with the Competition Commission of India.

Elonnai Hickok of Centre for Internet and Society, a suppose tank, says regulators don’t absolutely respect the nuances of the rising mountain of information and correctly safeguarding it inside the nation.

“The draft policy has not comprehensively addressed what is the appropriate framework for ensuring data as a national resource,” she says. “It appears to take a one-size-fits-all approach – bringing in privacy, intermediary liability, piracy, authenticity of information, etc. without considering potential exceptions and implications of such measures, including rights of individuals.” Anirudh Rastogi, founder of Ikigai Law, a agency tackling tech laws, contends that an excessive amount of onus has been positioned on entrepreneurs and their ventures to satisfy regulatory norms. “The draft proposes a host of consumer protection and anticounterfeiting measures, which is a good thing on principle,” he says. “But this also means a lot of requirements for platforms and other intermediaries which dilute their intermediary status.”

Not everybody agrees. For some homegrown entrepreneurs, measures that look protectionist provide a degree enjoying subject to compete with well-funded overseas company-owned behemoths.


“The govt is trying to level the playing field and take away some of the power held by well-funded giants over the Indian market,” says Ashish Gurnani, cofounder of Postfold, a web based bespoke attire model. “We can now hope to compete more on variety, curation and quality, rather than discounts alone.” When contacted, a DPIIT official concerned in the course of of drafting the policy, mentioned: “At present, we don’t have control over our data. Companies which control our data can say no to sharing it if we want that data. Servers are outside. We’re incapacitated as there is no physical or legal control. We want to create jobs through the policy”

(With inputs from Kirtika Suneja)

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About Beverly Hall

Beverly D. Hall writes for Entreprenuers and Leadership sections in AmericaRichest.

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