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Draft National E-commerce Policy: data localisation and priority to domestic companies

The draft National E-Commerce policy, of which MediaNama has a copy (pdf), includes debatable requirements like data localisation, an audit of foreign companies' source code, mandating RuPay on every e-commerce website, using Jan Dhan account transactions to create a creditworthiness profile of individual users, amongst others. The 19-page policy is representative of the interests of the government-constituted ecommerce think tank. It prioritizes e-commerce brands which have already been set up in India, and has clauses that discourage the free inflow of foreign capital in e-commerce. This could end up complicating things for the entire Indian e-commerce ecosystem, including consumers. The membership to the think tank excludes foreign-based brands like Amazon, Uber, Visa, MasterCard and others while accommodating companies started in India (though not necessarily incorporated here) like Flipkart, Jio, Ola, MakeMyTrip, Infosys, WIPRO, Paytm, and so on. Like the National Education and the National Telecom Policies which guide the government's approach for over 10 years, the draft National Electronic Commerce Policy will steer the approach of the government towards e-retailers, digital service providers and anyone else who conducts e-commerce in India. Breaking down the policy Localisation mandated and duty waivers: The e-commerce policy mandates localisation of data in India, consistent with the Srikrishna Committee's draft data protection bill. Localisation is an expensive exercise to undertake, especially in India, where data storage infrastructure is not very developed. In addition to that, there are civil rights objections to requiring the geographical residence of data that travels on the internet, which is a global network of networks.…

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I cover the digital content ecosystem and telecom for MediaNama.

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