India needs flexible E-commerce rules


One expects that the final regulations for e-commerce, drafted by the consumer affairs ministry, would be a lot friendlier than the drought. In addition to being restrictive and burdensome, the proposed regulations allow for subjectivity and harassment. Enforcing restrictions on directors, shareholders with above 10% stakes, and those with a 5-percent investment in linked firms, for example, will cause enterprises to stagnate.

 As with Associated Enterprises (AEs), these connected parties are not allowed to become sellers on the platform, nor can they do anything else that an e-commerce business is prohibited from doing. An AE can be any entity having common shareholders who possess above 5 percent or who own more than 10 percent of the company’s ultimate beneficial ownership. As a result of these constraints, business organizations would be unable to function effectively. 

It was also decided to expand the definition of an e-commerce company by including not only the entity running the platform but also any “affiliated third-party” or any other enterprise hired by the platform to fulfill orders. However, private label sales were previously allowed under the 2018 laws. E-commerce companies may no longer use their name or brand in a way that indicates that the product or service is linked with the marketplace.

This is a big step forward for consumers. One would seem that businesses should be allowed more flexibility to operate. A fallback provision is also included in the proposed regulations if a seller fails to provide goods or services or fails to fulfill its responsibilities as stipulated. To hold the marketplace accountable for the seller’s carelessness is unjust; marketplaces can only be held responsible for the services they provide. 

After all, they have no control over the inventory because they don’t own it. – They prohibit flash sales, which are described as sales organized by an e-commerce business that offer steep discounts and/or lower prices for a predetermined period on a limited number of items that can be sold by only a restricted group of merchants supervised by the e-commerce organization

Although just a select group of merchants are indeed cutting prices, it is difficult to comprehend why this should be prohibited. Retailers with many brands and single brands have sales all the time as well, and there are no questions raised about it. According to the proposed amendments, logistics providers will no longer be able to discriminate between vendors in the same category.

The $40 billion e-commerce business creates jobs for both blue-collar and white-collar workers, and foreign investors are pouring money into the industry from across the world. Importantly, these companies facilitate transactions for thousands of micro and small businesses and generate lives for their employees. 

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