On 23rd Feb.19 , Department of Industry and Internal Trade released draft National e-Commerce Policy that sends a clear message that India and its citizens have a sovereign right to their data. India has proposed regulating cross border data flows, locating computing facilities within India to ensure job creation and setting up a dedicated ‘data authority’ for issues related to sharing of community data.
Draft Policy focuses on six broad issues of the e-commerce sector, which includes data, infrastructure development, e-commerce marketplaces, regulatory issues, stimulating domestic digital economy and export promotion through e-commerce.
The policy bars “sensitive” data collected and processed here but stored abroad from being shared with foreign governments and other business entities outside India. It has suggested a three year period for companies to setup data storage here and advocates a review of the current practice of not imposing custom duties on electronic transmissions.
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Some of the key points are as under :
A. Key Issuers Addressed
- Data ;
- Infrastructure development ;
- e-Commerce marketplaces ;
- Regulatory issues ;
- Stimulating domestic digital economy ;
- Export promotion .
B. Indian Control Over Data
- Govt to be given access to source code, algorithms of AI systems Impose custom duties on electronic transmissions to reduce revenue loss;
- Bar sharing of sensitive data of Indian users with third party entities, even with consent;
- A ‘data authority‘ to look at community data.
C. Local Presence for Apps & Websites
- All e-commerce websites, apps available for downloading in India to have a registered business entity here;
- Non-compliant ecommerce app/website to be denied access here.
D. Incentives for Data Localisation
- Location of the computing facilities like data centres, server farms within India;
- Firms to get 3 years to comply with local data storage requirements;
- Data storage facilities to get ‘infrastructure status’.
E. FDI IN e-Commerce
- FDI only in marketplace model;
- No FDI in inventory model.
F. e-Commerce Trade
- Curbs on Chinese e-Commerce exports ;
- Gifting route, often used by Chinese apps, websites, banned for all parcels except life-saving drugs;
- Integrating Customs, RBI and India Post to improve tacking of imports through e-Commerce ;
- Incentives & e-commerce export promotions;
- e-Commerce startups may get ‘infant industry’ status raising limit for courier shipments from Rs 25,000 to boost e-Commerce export.
- No separate regulator for e-Commerce sector;
- e-Consumer courts to be developed.
Draft Policy has not suggested parameters for its implementation and also it should take into account emerging technologies like AI, ML , IoT and Block Chain.
Final policy will be issued based on inputs from public and various stakeholders .