Current Affairs Brain Booster for UPSC & State PCS Examination

Topic: Draft Rules on e-Commerce

Why in News?

• The Ministry of Consumer Affairs, Food and Public Distribution has proposed new changes to the Consumer Protection (E-Commerce) Rules, 2020.

Key Highlights of the Draft Rule

• The draft rules released recently are broadly in line with the IT intermediary rules announced for social media companies earlier this year.
• According to the new provisions, e-commerce companies would need to register with the Department of Promotion for Industry and Internal Trade (DPIIT).
• New provisions proposed that the information sought by the Government agency will have to be produced by the e-commerce company “within 72 hours of the receipt of an order from the said authority”.
• On the lines of IT intermediary rules, the Consumer Affairs Ministry has proposed to mandate e-commerce companies to appoint a grievance officer, a chief compliance officer, and a nodal contact person “for 24×7 coordination with law enforcement agencies”.
• The rules are applicable for all goods and services bought or sold over digital or electronic networks, including digital products.
• They are valid for all models of e-commerce, including marketplace and inventory models, including multi-channel single brand retailers and single brand retailers.
• Furthermore, to make the existing e-commerce norms more stringent, the Ministry is looking to ensure that these firms do not use data collected through their business for “unfair advantage” and prevent any possible links they may have with traders selling goods and services on their platforms.
• On this front, the Government has called for disallowing “specific flash sales” on e-commerce platforms.
• Conventional e-commerce flash sales are not banned. An only specific flash sales or back-to-back sale which limit customer choice, increase prices and prevents a level playing field are not allowed.
• A “flash sale” is defined as a sale organised by an e-commerce entity at significantly reduced prices, high discounts or any other such promotions or attractive offers for a predetermined period of time.
• Additionally, the proposed rules also look to add to the Centre’s push behind domestic goods.
• They propose that e-commerce firms should mention the name and details of any importer from whom it has purchased such goods or services.
• These firms will also have to provide alternative suggestions to customers before they make a purchase “to ensure fair opportunity for domestic goods”.

Indian E-commerce Industry

• The Indian E-commerce market is expected to grow to US$ 200 billion by 2026 from US$ 38.5 billion as of 2017.
• Much of the growth for the industry has been triggered by an increase in internet and smartphone penetration.

Government Initiatives

• Since 2014, the government of India has announced various initiatives, namely Digital India, Make in India, Start-up India, Skill India and Innovation Fund.
• National Retail Policy: The government had identified five areas in its proposed national retail policy—ease of doing business, rationalisation of the licence process, digitisation of retail, focus on reforms and an open network for
  digital commerce—stating that offline retail and e-commerce need to be administered in an integral manner.
• In order to increase the participation of foreign players in E-commerce, Indian Government hiked the limit of FDI in E-commerce marketplace model to up to 100% (in B2B models).
• Heavy investment made by the Government in rolling out fiber network for 5G will help boost E-commerce in India.