Multiple ministries at work on their own ecommerce rules

BENGALURU: Even as an umbrella ecommerce policy is on the anvil, several ministries are working in silos to frame their own set of rules, pushing to the margins the industry’s ask for a consolidated set of guidelines for the sector.

Commerce and industry minister Piyush Goyal had said in June that a national ecommerce policy would be ready within 12 months. However, the ministry of electronics and information technology (MeitY) and the consumer affairs ministry have started parallel consultations to frame their own rules to regulate ecommerce companies.

While MeitY has set up a panel to regulate non-personal data, the consumer affairs ministry has floated draft guidelines for consumer protection. These make up a significant portion of the Department for Promotion of Industry and Internal Trade’s draft national ecommerce policy.

The DPIIT, which was earlier known as the Department of Industrial Policy and Promotion, has made little progress in finalising its draft rules, which it had framed within six months of getting the mandate.

In its earlier avatar, the DPIIT took charge of all “matters related to ecommerce” in September last year, fixed holes in the foreign direct investment rules through Press Note 2 and drafted a policy to better regulate players in the space.

“They (MeitY and the consumer affairs ministry) were always going to be the owners of the pieces around data and consumer protection in the ecommerce policy, but they seem to have taken ownership separately,” said a person who closely engages with the government on its ecommerce policy. “It’s unfortunate, because the sector could really do with clarity and not more confusion.”

Ecommerce is tricky to regulate as it touches several domains such as IT, retail, payments and consumers, experts and industry insiders said. “It seems that the government is dividing the ecommerce policy into multiple parts rather than coming up with a consolidated one,” said Satish Meena, senior forecast analyst at Forrester Research. “The biggest issue is that the companies don’t know who to engage with as many fronts are being opened.”

The government should have set up a joint committee with stakeholders from all ministries concerned to come up with a unified policy for the sector, Meena said, adding it could be too late given the significant amount of work that had already gone into drafting the policy.

Working with so many regulators and ministries is adding to a growing disconnect between companies and the government, top executives of large ecommerce firms told ET. “We had sent our inputs around data localisation and data sharing to the DPIIT, but we’re unsure if those are being heard,” said an executive of an ecommerce company who did not want to be named.