The development also indicates a more cautious approach to regulating the sector, since India weighs the potential impact on foreign investments and domestic e-commerce players in the evolving global trading landscape.
“It is not the right time to continue with the release of the e-commerce policy, given the changing global geopolitical scenario,” said one of the two people on condition of anonymity. “Now that trade dynamics are shifting and uncertainties are popping up, we must carefully assess the potential impact before we continue.”
With Washington who takes on a more protectionist position in the context of the Donald Trump presidency, India can be re -calibrated its approach, aimed at broader trade negotiations and strategic partnerships.
Objectives and resistance
The policy, which aims to tighten the data management, competition and consumer protection regulations, is currently evaluated at the highest level of the Indian government. It was also designed to better regulate online market places, creating a fair and competitive environment. It has confronted with resistance of foreign e-commerce giants due to proposed restrictions in the field of direct foreign investments, requirements for data room and increased compliance tax, among other things.
The policy, which was expected to be announced in 2023, has encountered repeated delays. The final round of the consultations of stakeholders was held in August 2023.
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“The Ministry of Promotion of Industry and Internal Trade (DPIIT), which is responsible for developing balanced legislation in coordination with the Department of Consumer Affairs, is cautious about the issue and weighs the broader implications of each regulatory movement,” said The second person.
The e-commerce sector of India is currently regulated by several government entities, including the Ministries of Consumer Affairs, Electronics and Information Technology (Meity) and Commerce. These ministries deal with various aspects such as consumer protection, data management and commercial practices.
Important issues such as data privacy, marketplace obligations and rules for direct investments (Direct Investment (FDI) for e-commerce players are also discussed.
Questions emailed to the secretary of the department for promotion of industry and internal trade
(DPIIT) and spokespersons of PMO, Ministries of Trade, Consumer Affairs, Amazon and Flipkart remained unanswered.
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In response to an e -mail -query, a spokesperson for the American embassy suggested approaching the Indian government for comments about its policy proposals or planning.
Economic
According to a report from Pahle India Foundation (PIF), a policy research institute established in Delhi, e-commerce is an important engine of the generation of employment in India. On average, online suppliers employ 54% more people and almost twice the number of female employees compared to offline suppliers.
Online suppliers have generated 15.8 million jobs in India, including 3.5 million for women, with around 1.76 million retail companies participating in e-commerce activities, according to the August 2024 report.
Strategic focus
“We must illuminate outdated foreign exchange rules to take advantage of the new Trump rates on China. Restrictions such as the 25% discount cup for e-commerce export and strict invoice tuning make it difficult for small companies to grow, “said Rahul Ahluwalia, founder of the Foundation for Economic Development, a policy for advocacy.
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“We have to prioritize economic fair play, especially at American companies. Trump is in favor of rates to combat unfair practices, and because the US is an important strategic partner, his honest trade measures in our interest,” said Ahluwalia.
Mint It reported on January 1, 2024 that the policy of the Prime Minister (PMO) was investigated to understand the potential impact on domestic retailers and small players.
Mint reported on November 22, 2023 that the proposed e-commerce policy may not be obliged to register online companies to register in the Open Network for Digital Commerce (ONTC). Instead, the policy suggested voluntary registration, which marked a shift of the government's earlier position.
According to an Invest India report, the e-commerce market in the country will grow to $ 325 billion and the digital economy up to $ 800 billion by 2030.
India, with 881 million internet users, is the world's second largest online market. The growing digital economy could make the third largest online retail market by 2030, according to the Invest India report.
