Indian government plans new laws for e-commerce

Despite rapid growth in the recent years, e-commerce remains at a nascent stage in India and is drawing increasing investment from players such as Amazon and Alibaba

 The Dollar Business Bureau

e-commerce-TheDollarBusiness Several e-commerce companies such as e-Bay and Amazon have urged the government to ease customs procedures to boost India’s exports

  The $3.5 billion e-commerce industry in India is expected to change significantly with a series of government plans underway to structure the largely unregulated sector. The Ministry of Consumer Affairs has stated that the government has constituted an Inter Ministerial Committee for considering the requirement of separate legislation in respect of Direct Selling/Multi-Level Marketing. Raosaheb Patil Danve, Minister of State for Consumer Affairs, informed the Parliament yesterday some e-commerce businesses have come under the purview of the Prize Chits & Money Circulation Schemes (Banning) Act, 1978 administered by Department of Financial Services, which could give rise to problems for the growing industry. The minister says that instead of incorporating theses models into the PCMCS Act, the Committee will consider a separate legislation in consultation with all stakeholders concerned including global practices in operation. The Committee will also identify of goods, services and operational issues to be covered under the new legislation. The government has also said that it has received complaints of anti-competitive nature against online trading companies such as Flipkart India Pvt. Ltd., Jasper Infotech Pvt. Ltd., Xerion Retails Pvt. Ltd., Amazon Seller Services Pvt. Ltd., and Vector e-commerce Pvt. Ltd., etc. The Confederation of All India Traders have complained that strategies such as predatory pricing and other issues like FDI, taxation by online retailers is hurting the offline business. In a related development, the government has said that the Department of Posts has tied up with major e-commerce companies for delivery of e-commerce parcels across the country with the cash on delivery facility included. The move is a part of the government’s aim to modernise India Post and boost e-commerce. According to research firm, Gartner, India is the fastest growing e-commerce market in Asia and the Indian e-commerce market in India is expected to grow around 70% y/y to around $6 billion in 2015. The implementation of the Goods and Services Tax (GST) is expected to further propel e-commerce growth in India.  

This article was published on December 24, 2014.