The government
has decided to step in and regulate e-commerce business in the
country, especially with a view to protect consumer interest. Sources
said the department of consumer affairs has been tasked with putting in
place a framework that goes beyond consumer protection and ensures that
there are sufficient safeguards for orderly functioning of the rapidly
growing sector. These are in addition to regulations that the department
was planning under the Consumer Protection Act.
While brick-and-mortar shops are registered with local authorities, the regulations for e-commerce are weak. Similarly, officials said, there is no clear forum for the consumer to approach for grievance redressal. Officials pointed to threats from white goods companies of withdrawing warranty, arguing that e-tailers are under-cutting them. "How can you allow this kind of a regime? The e-tailers as well as manufacturers are liable," said a source.
In addition, they said, companies are making use of loopholes in the regulatory architecture to operate with foreign capital, an issue that is also being looked at by the Enforcement Directorate. There are also tax disputes involving Amazon in Karnataka and Snapdeal in Delhi.
The move to regulate e-commerce comes at a time when trader lobby groups, seen to be close to ruling BJP, have protested against the likes of Flipkart, Amazon and Snapdeal as these players are growing in scale and are now being seen as a threat to the brick-and-mortar stores.
In fact, after the BJP came to power, the department of industrial policy and promotion (DIPP) dropped proposals to allow FDI in B-to-B e-commerce as the government saw it as a move to allow overseas retailer through the back door. Commerce & industry minister Nirmala Sitharaman has repeatedly said the government will not allow foreign players such as Walmart and Carrefour in multi-brand retail.In recent weeks, the government has changed its argument, saying it will wait for the local players to gain muscle before allowing overseas companies, a model followed in China, which resulted in Alibaba's massive rise.
While brick-and-mortar shops are registered with local authorities, the regulations for e-commerce are weak. Similarly, officials said, there is no clear forum for the consumer to approach for grievance redressal. Officials pointed to threats from white goods companies of withdrawing warranty, arguing that e-tailers are under-cutting them. "How can you allow this kind of a regime? The e-tailers as well as manufacturers are liable," said a source.
In addition, they said, companies are making use of loopholes in the regulatory architecture to operate with foreign capital, an issue that is also being looked at by the Enforcement Directorate. There are also tax disputes involving Amazon in Karnataka and Snapdeal in Delhi.
The move to regulate e-commerce comes at a time when trader lobby groups, seen to be close to ruling BJP, have protested against the likes of Flipkart, Amazon and Snapdeal as these players are growing in scale and are now being seen as a threat to the brick-and-mortar stores.
In fact, after the BJP came to power, the department of industrial policy and promotion (DIPP) dropped proposals to allow FDI in B-to-B e-commerce as the government saw it as a move to allow overseas retailer through the back door. Commerce & industry minister Nirmala Sitharaman has repeatedly said the government will not allow foreign players such as Walmart and Carrefour in multi-brand retail.In recent weeks, the government has changed its argument, saying it will wait for the local players to gain muscle before allowing overseas companies, a model followed in China, which resulted in Alibaba's massive rise.
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