E-commerce may soon come under the lens of nine ministries, RBI

Already facing flak for their heavy discounting, poor products, and delayed delivery, e-commerce companies may be staring at regulatory hassles. They may soon be governed by regulations from as many as nine ministries, including the Information & Broadcasting and IT & Communications ministries, besides complying with Reserve Bank of India rules.

The Ministry of Consumer Affairs has floated a note to this effect for the consideration of a Committee of Secretaries, stating that there should be a level-playing field between online and offline retailers.

“In the absence of specified regulations and monitoring of online trade, there is no level-playing field

vis-à-vis traditional retail(ers), who are subject to (a) number of licences, permissions and strict supervision by State authorities,” a draft of the note, which was seen by BusinessLine, states.

The Ministry has sought to identify issues and demarcate the e-commerce activities to be handled by various ministries and departments.

“The industry’s operations are too diverse and complex to be under the purview of any single department or ministry,” the note said.

Complaints galore

The Ministry said it has been receiving numerous queries and complaints from trade organisations, consumer forums and MNCs on subjects such as predatory pricing, tax evasion, online fraud, privacy and data protection, as well as FDI related to the e-commerce sector.

“Online retailers are taking undue advantage by operating from low-tax geographical regions compared to traditional retailers.

“In the absence of specified regulations, there is no level playing field between the two segments of retail,’ it said, adding that the e-commerce explosion threatens the country’s 1.1 crore retail shops, which employ over 3.3 crore people.

The move by the Ministry of Consumer Affairs will add to the woes of the e-tailers even though investors have not stopped pumping money into the sector.