India’s e-commerce policy may face further delays as net FDI inflows slow: report

India’s e-commerce policy, in the works since 2018, could face further delays as the government seeks to maintain current terms with major players in the sector such as Walmart-owned Flipkart and Amazon amid a slowdown in net foreign direct investment inflows, according to a Moneycontrol report.

According to the report, a review meeting with top officials last week unofficially concluded that the policy was not a priority.

The first draft of the e-commerce policy was released in 2019. However, because the policy covered various areas, including data regulation, antitrust, consumer protection and intellectual property, it was deemed too broad to be implemented.

The Department for Promotion of Industry and Internal Trade (DPIIT) and the Ministry of Commerce have started working on the new policy following challenges raised by the industry.

A senior director of an e-commerce platform told Moneycontrol, “Nobody in the industry has seen a complete, revised draft since then. At a meeting of industry leaders last year, a slide was presented with five points that talked about broad policy objectives, such as that e-commerce companies should do right by the consumer.”

Amid delays in implementing e-commerce policies, players like Flipkart, Amazon, Zomato, Swiggy, Tata, Reliance, Shiprocket and Meesho have said that in the absence of clear guidelines to indicate what exactly constitutes a manipulative practice, e-commerce players may become targets for small discounts, the report added.

According to reports, the Confederation of All India Traders (CAIT) has expressed “complete concern over the inordinate delay in implementation of e-commerce policy and regulations under the Consumer Protection Act”. The body further added that the delay will be a “slowing down position” for the business community in the country.

Currently, Flipkart is the e-commerce market leader in India with a 48% market share, according to a report by AllianceBernstein. Meanwhile, Softbank-backed Meesho has emerged as the fastest-growing e-commerce platform in terms of user base in India. The Indian e-commerce business is expected to reach $325 billion by 2030, according to a report by Invest India.