The new e-commerce policy being drafted by the Centre will have a nuanced approach on data localisation so as to balance the free flow of business with privacy concerns, a senior government official said on Monday.

“The task force has given its recommendations. The government will continue to hold discussions based on it,” said Anup Wadhawan, Special Secretary, Department of Commerce, at a media interaction.

Wadhawan added that the draft policy on e-commerce would be finalised soon. “We don’t want to continue with the vacuum in the e-commerce policy space.”

The policy will seek to define e-commerce, strengthen foreign direct investment laws in the sector, address regulatory and competition issues, and take care of consumer interests, including data protection and privacy.

When asked if e-commerce companies will be asked to store consumer data locally, Wadhawan said the global policy on data was nuanced and India, too, has to tread carefully. “We have to balance the interest of free flow in business with security concerns and addressing privacy issues.”

Data storage in India

As per the task force’s recommendation, data generated by users in India from various sources, including e-commerce platforms, social media and search engines, should be stored exclusively in India, and a suitable framework needs to be developed for sharing the data within the country.

Wadhawan said the new policy would have adequate provisions to protect the interests of consumers and the State government’s requirements would be kept in mind. “Like many other countries, we will consider an online grievance redressal mechanism. Of course we will keep in mind division of power between the Centre and States,” he said.

The task force, headed by Commerce Secretary Rita Teaotia and comprising senior officials from various ministries including finance, consumer affairs, and telecom, was set up earlier this year by the Commerce & Industry Minister, Suresh Prabhu, to suggest a framework for a comprehensive e-commerce policy.

An e-commerce think-tank led by Prabhu will now examine various aspects of the recommendations and hold further consultations before it finalises the draft.

The draft e-commerce policy also recommends tightening the scrutiny of mergers. Asked how the policy would address competition issues, Wadhawan said it would try to ensure fairness in the market place and prevent predatory pricing. “The policy will seek to uphold underlying competition principles,” he said.

Mergers & acquisitions will also be part of the policy, the Special Secretary said.

India’s e-commerce market, currently valued at about $ 27 billion, is one of the fastest growing in the world.

A comprehensive e-commerce policy, apart from encouraging investments in the sector, would also help the country take a well-informed stand in the area at global forums, where pressure is growing on India to get into negotiations to liberalise the sector.

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