BC Bhartia, the national president of CAIT, has demanded that the government release the National E-Commerce Policy before the festival season of Diwali starts in October, PTI reports. The Confederation of All India Traders, represents several brick-and-mortar merchants.
“In the absence of any policy just before the festive season beginning October 15, e-commerce portals will play their dirty game of predatory pricing, deep discounting and loss funding, which will vitiate the market,” Bhartia was quoted as saying in a statement.
Event announcement: Announcing #NAMApolicy event on India’s E-commerce Policy; Sept 26th 2018, Delhi
This concern isn’t new. Last month, the traders’ body held a roundtable conference where they aired their grievances. Sudhanshu Pandey, a senior Commerce Ministry bureaucrat was present at this meeting. The trade body:
- complained of the government’s inaction in curtailing the creeping dominance of e-tailers in the market.
- For instance, the government was not implementing the spirit of a prohibition on FDI in inventory-based e-commerce, which players like Amazon and Flipkart circumvent by indirectly controlling a large ‘third party seller’ like WS Retail or Cloudtail.
Their frustration was especially curious since the e-commerce policy — a leaked draft of which was the subject of the discussion that day — seemed to already favour brick-and-mortar traders heavily. For instance, the policy places restrictions on e-commerce companies from offering steep discounts and seeks to limit their impact on market prices as a whole.
E-commerce policy consultation delayed
Pandey said in that roundtable that the Commerce Ministry would put out a public draft for comments in the next ten days, but over a month and a half since that promise, the draft hasn’t surfaced.
In an RTI response to MediaNama, the Commerce Ministry reiterated its promise of a public consultation. As such, the CAIT’s demand that the policy itself be rolled out by mid-October seems unrealistic, since industry-wide government policy consultations like this generally take a lot of time to conclude.
In his statement, CAIT’s secretary general Praveen Khandelwal said that data localisation, the controversial concept that Indians’ personal data should be stored on servers in India, should remain in the policy, to check “unauthorised infiltration of goods through e-commerce”. It’s unclear how data localisation would achieve that goal, though, since hosting a copy of user data in India has nothing to do with foreign-based sellers shipping goods into India.
Who didn’t get a say in e-commerce policy
In an RTI response to MediaNama, the Commerce Ministry revealed who was and wasn’t on the think thank that shaped most of the leaked draft e-commerce policy. The committee — and subcommittees — largely consist of companies incorporated in India and founded by Indians. It’s unclear why the government composed the committee this way, since many competitors of the think tank’s members — such as Amazon and Uber — are led and operated in India by Indians.
Even if one goes by source of capital, the startups included in the think tank are largely funded by investors and VCs from countries like Singapore, China, Japan, and the US. Effectively, brands of Indian origin are the only ones that seem to have made the cut. Even in that fold, there are many like Zomato and Oyo that did not make it. Even hyperlocal delivery companies like Grofers, Bigbasket, and Dunzo were excluded.
There is also sectoral exclusion. In payments, Paytm seems to be the only dedicated payments company present. The subcommittee for fintech comprises regulators, industry associations, the government, the NPCI, and Paytm — Reliance Jio is also included, probably owing to its JioMoney app. Its competitors like Mobikwik and Freecharge are not included (though PhonePe’s parent Flipkart was on the think tank, it was not in the fintech subcommittee). Payments majors like Visa, Mastercard and PayPal were also not on the committee.
These are some glaring omissions, considering that relatively small players like Pepperfry and Urban Clap are represented.