Consumers looking for good online deals may soon be disappointed, as the government is proposing a policy that makes a strong case for championing ‘Indian’ online enterprise. The policy aims at ensuring a level playing field to local businesses in a market where deep-pocketed foreign companies are investing heavily.
The draft e-commerce policy has proposed that ‘deep discount’ be stopped from a specified date to regulate the e-commerce sector. Deep discounting policy is a practice to lower prices on e-commerce platforms like Amazon and Flipkart.
The policy, the first of its kind for the booming segment, has proposed legislation that will also cover food delivery sites such as Swiggy and Zomato, online service aggregators like UrbanClap as well as platforms offering financial and payment products such as Paytmand Policybazaar.
The plan is to include multiple aspects in the legislation — from FDI, local storage of data, protecting micro small and medium enterprises to consumer protection and grievance redressal.
A key element of the draft policy that will affect consumers is the plan to check discounts, something that offline retail lobbies have been pitching for. While the e-commerce companies officially say that sellers offer discounts and not the online marketplaces, executives acknowledged that there was an element of discounts, which resulted in the massive cash cash infusion to sustain the operations.
The government is looking at ways to back Indian ecommerce players without violating international trade agreements. The steps it is considering include measures to promote Indian ecommerce companies by giving them incentives just as China did, and engaging Internet giants to see if local companies can be given preference on websites within the country. It also considered if the sector needs a nodal agency or more laws so that local companies don’t lose out to international players.
A special policy is also envisaged for companies set up by Indians and selling 100% made-in-India goods. Unlike the present regime where e-commerce is done through a “marketplace” or a platform where others sell, the new dispensation will allow an “inventory-based” model where the companies will be directly selling to consumers with up to 49% FDI all.