Proposed amendments to shopper safety guidelines will hurt shopper curiosity, harm the expansion e-commerce sector

It is vitally troublesome to fathom the aim behind any coverage, notably one that’s framed below shopper safety tips, that reduces competitors available in the market and makes an attempt to restrict alternative (and decrease costs) {that a} really aggressive enterprise setting affords to the top shoppers.

Earlier this week, the federal government proposed a set of amendments to the Client Safety (E-Commerce) Guidelines, 2020, which amongst different parts, proposed the banning of flash gross sales, making extra disclosures by way of product description, and limiting the sale of in-house manufacturers. The proposed amendments additionally make the e-commerce platform operators probably accountable for delays in transactions by retailers working on the platform regardless that as per the prevailing definition of an e-commerce market, the e-commerce platform proprietor or operator can not affect any transaction undertaken by the retailers utilizing such a platform.

To prime all of it, the proposed guidelines additionally make it necessary for the platform operator to supply a suggestion of a “Made-in-India” product ought to a shopper want to purchase an “imported” product, based mostly on no tangible product attributes, which appears not solely to skirt the difficulty of enabling and rising globally aggressive home companies, however essentially undercuts free shopper alternative that underpin market forces. The country-of-origin idea can also be troublesome to categorise when one considers the present actuality of worldwide interlinked provide chains.

Whereas the Client Affairs Ministry has clarified that these are solely proposals and suggestions might be given till July 6, 2021, the actual fact that such ambiguous proposals have even made it to the draft stage sadly reconfirms that the conceptual grasp of fundamental issues pertaining to economics, commerce, and trade appears to be misplaced within the technique of policymaking. The foundations intention to solid too vast a web and sadly, don’t present any readability in any respect to a sector already mired in regulatory uncertainty.

E-commerce, lately, has already considerably empowered each shoppers and small companies within the nation. Thousands and thousands of first-generation entrepreneurs and SMEs within the nation have been capable of develop their enterprise and improve their attain by way of numerous e-commerce platforms that presently exist. Within the subsequent few years, with the tens of hundreds of crores of funding within the e-commerce ecosystem by many Indian and worldwide gamers, and with the quickly rising penetration of 4G (and in close to future, 5G) smart-phone / web entry, a wholesome (and unencumbered by mindless bureaucratic coverage impediments) e-commerce ecosystem will result in many optimistic transformations for India which may profit a whole lot of hundreds of thousands of Indians by the use of extra alternative and decrease costs, and hundreds of thousands of MSMEs that may extra simply discover native, regional, nationwide, and even worldwide markets for his or her items & companies utilizing one or many e-commerce platforms. A wholesome e-commerce ecosystem can even present additional impetus to many related industries comparable to logistics and final mile supply, IT & ITES, monetary companies, coaching & skilling companies, whereas creating hundreds of thousands of jobs unfold throughout nearly each district and nearly each block within the nation.

One wonders what these draft rules are supposed to realize. These appear to perpetuate an inclination in direction of ham-handed rules on digital companies with out understanding the nuanced implications of such strikes on stakeholders throughout the worth chain.

It additionally asks the query, far more essentially, that shouldn’t the one consideration be in direction of a very powerful stakeholders of all, that incentivize an environment friendly, clear, and aggressive e-commerce ecosystem – the a whole lot of hundreds of thousands of Indian shoppers, after which hundreds of thousands of MSMEs and entrepreneurs who can profit probably the most from the disintermediation that e-commerce platforms probably provide to them.

Prima facie, whereas the draft norms are geared toward strengthening the patron grievance redress mechanism, sadly, the proposed norms will solely create extra confusion and compliance hurdles as they overlap with many current rules governing inner commerce. An over-regulation of the sector overlooking its particular wants will hinder this progress at a important time and advantages nearly no stakeholder group.

Whereas there isn’t any arguing that buyers’ curiosity need to be protected always, the proposed coverage sadly is prone to do exactly the other whereas additionally stymieing the expansion of this very vibrant and positive-transformational sector for India.

The author is Chairman and MD, Technopak Advisors)

(The one-stop vacation spot for MSME, ET RISE gives information, views and evaluation round GST, Exports, Funding, Coverage and small enterprise administration.)

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