Draft e-commerce policy gets the strategic intent right

India’s national draft e-commerce policy which was unveiled on Monday gives the first clear sense of the framework government has in mind for the rapidly evolving sector. An important part of the draft overlaps the recommendations of the BN Srikrishna panel on data protection. Therefore, prior to finalising an e-commerce policy government has to make sure that all laws dealing with data, privacy, and digital transactions are consistent. A bird’s-eye view of the e-commerce policy suggests that there is an emphasis on using the platform more strategically to promote Indian entrepreneurship. This is unexceptionable and deserves support.

The challenge, however, will lie in the approach to actualise the overarching aim and the trade-offs which have to be made. The backdrop to all the reports is that the digital world seamlessly spans national boundaries and has evolved fast. Therefore, justifiable steps such as an insistence on data localisation have to be balanced by the awareness that Indian start-ups should not be penalised by raising entry barriers through additional costs. Similarly, while it may be necessary to tweak legislation to assist Indian entrepreneurs who wish to retain control, access to capital should not become cumbersome as it acts as a barrier to first generation entrepreneurs. Given these complexities, the current approach is sensible as it fleshes out a policy and opens it to adjustments based on stakeholder feedback.