Government departments: E-commerce rules to hit investor sentiment


(This story originally appeared in on Jul 22, 2021)

Several government departments have expressed concerns over the proposed consumer protection norms for e-commerce companies, arguing that it will impact ease of doing business and the overall investment sentiment.

While some of the agencies have shared their feedback with the consumer affairs department, which is piloting the initiative, officials said the proposal creates multiple challenges for e-commerce players, beginning with Licence Raj.

“The moment you ask someone to register, which is what has been suggested, you ask them to queue up and start a bureaucratic process,” a senior government official told TOI. Under the proposed rules issued for discussion, each ecommerce player needs to register with the department for promotion of industry and internal trade.

The view within several departments is that there is need for investments to help the economy recover from the bruising impact of the second wave of the Covid-19 pandemic. Some government officials said nothing should be done to derail the investment atmosphere and every effort should be made to build on the raft of reform measures that the government has unveiled to attract investment.

The draft rules, released for public comment, have already triggered a backlash from industry, especially from overseas investors, who are wary of government regulations, and are complaining of periodic rule changes. Some are seeing the rules as a fallout of intense lobbying by the powerful traders’ lobby as well as some of the homegrown companies that have forayed into e-commerce.

Government officials also said that the consumer affairs ministry’s proposals also intrude into the Competition Commission of India’s turf and something that is best avoided, given that an independent agency was set up under a statute to deal with measures to check monopoly behaviour.



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