India Releases Draft E-Commerce Policy

India is considering a proposal that would restrict the sharing of sensitive e-commerce data while treating the data as a “national asset,” the government said in a draft of its “national e-commerce policy.” The draft, released Feb. 24, has been deemed “highly protectionist,” according to a report on Indian legal news portal Live Law, and stakeholders are concerned about whether the policy actually can be implemented and enforced. If the proposal is implemented, data flow involved in e-commerce “cannot be made available to a foreign government without the prior permission of Indian authorities,” the report said.

The draft policy states that “all product shipments from other countries to India are to be channelized through the customs route,” according to Live Law’s report. The draft policy also suggests that “implementation of (Customs Electronic Data Interchange) mode at courier terminals shall be fast tracked to facilitate quicker and easy dispatch of export consignments.” Live Law’s report noted that “provision will be made to source Export Data Processing and Monitoring System (EDPMS) data from [Reserve Bank of India] for confirmation of payments, instead of Bank Realization Certificate as per the draft policy.”

As part of its effort to “promote exports though e-commerce,” the draft policy suggests increasing “the existing regulation exemption limit … for consignments through courier mode” and “removal of provisions for collecting fee on applications submitted to claim export benefits.” The draft also suggests establishing “Air Freight Stations (AFS) off the air ports” for air cargo processing, specifying a location where “necessary cargo preparation and documentation can be done.”

The policy would also require all e-commerce affiliates in India to be registered with the government as the “importer on record,” according to the report, and companies would need to appoint a local representative. “At present, certain Chinese e-commerce companies are operating in India without having a registered entity or local representatives in India,” the report said. “This proposal in the draft policy is intended to [rein] in activities of such foreign companies.”