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The much-awaited e-commerce policy may be included in the Indian government's next 100-day plan. money control.
The policy aims to resolve controversial issues such as additional taxes on e-commerce companies, data ownership, prioritization of products in search results, and private label sales.
“Much of the e-commerce policy is already being worked out at the official level. If there is political support, it could become part of the government's 100-day plan,” a senior government official revealed.
Policy under development since 2016
The e-commerce policy has been in development since 2016, with consultations with stakeholders at all levels.
However, its completion has been delayed due to conflicts of interest between small businesses and large e-commerce platforms.
Small and medium-sized enterprises (SMEs) are insisting on stricter rules governing e-commerce operations, including restrictions on the sale of private label products and the sharing of customer data.
Conversely, online marketplaces are lobbying for a more lenient approach.
Expected provisions of e-commerce policy
“The e-commerce policy is likely to be part of the government's 100-day plan, which will determine whether e-commerce operators will need to pay additional tax if goods are purchased above a certain limit,” the official said. We look forward to clarification.”
The policy will determine whether additional taxes apply to purchases over certain limits on e-commerce platforms.
Additionally, it aims to establish rules for ad-based search results on these platforms, providing clarity and structure to this rapidly growing field.
E-commerce policies for prioritizing search results
The official further elaborated on the issue of product prioritization in search results.
Customers typically choose the items that appear in top searches, which often includes brand advertising on the platform.
“Searching can also be biased based on ownership or products stored in the e-commerce platform's warehouse,” the person added.
E-commerce platforms charge sellers a fee to store goods in warehouses to ensure speedy delivery, a practice that will come under scrutiny under the new policy.
Policies to protect small and medium-sized businesses from private brands
While the US allows online sellers to retail private labels, Indian policymakers are under pressure to take a stricter approach to protect small businesses.
Small and medium-sized enterprises account for more than 80-85% of businesses in India, and allowing e-commerce platforms to retail private labels could hurt these smaller competitors.
Another government official said: “E-commerce companies should not be allowed to have direct ownership of companies. E-commerce companies often try to circumvent current policies through related party ownership. It's a complex system.”
