The new e-commerce policy document by the DPIIT (Department for Promotion of Industry and Internal Trade) which is to be released soon for public consultations, says that the actions prohibited for online retailers will apply to their associates and related parties and that the government will identify such entities to ensure compliance.
The policy document, which is expected to be released for public consultations soon, vastly extends the scope of regulation over the country’s growing e-commerce sector.
“Actions and things that cannot be done by the platform entities can also not be done by any of its associates and related parties. Government may, from time to time, notify parties that fall in the definition of associates and related parties," said the draft policy released by the DPIIT at an inter-ministerial meeting on Saturday.
The government may be hinting at India’s foreign direct investment (FDI) rules under Press Note 2, 2018, which prohibit e-commerce companies from holding direct stakes in or controlling the inventory of sellers on its platform. The draft also wants e-commerce entities to “ensure equal treatment of all sellers or vendors registered on their platforms and not adopt algorithms that result in prioritizing select vendors".
Since e-commerce in India is now governed by several regulations under various ministries, the draft policy makes it clear that a ‘holistic mechanism’ will be created to prevent anyone from capitalizing on this multi-ministry setup, causing delays to issues and address grievances.
In the past, physical retailers’ lobbies such as the Confederation of All India Traders (CAIT) have alleged that e-commerce majors, including Amazon India and Flipkart, had found ways to flout rules and own indirect stakes in sellers while giving them preference on their platform, according to Livemint.
