India’s digital economic system has skilled outstanding development, remodeling the tasks of platforms and intermediaries. Whereas e-commerce platforms have made strides in specializing in client safety and security, aligning government-based guidelines with these efforts is vital. In July 2020, the Client Safety (E-Commerce) Guidelines, 2020 had been notified to specify duties and liabilities of e-commerce entities and sellers on their platforms. The continued proposal for revision to those Guidelines and a separate E-Commerce Coverage have to be rigorously crafted to keep away from unintended penalties and uphold the federal government’s broader coverage targets.
The Indian digital market has been witnessing a big enhance in consumption with the net shopper base anticipated to succeed in about 400-450 million customers by 2027. Therefore, hanging a stability between safeguarding shoppers and selling market development turns into paramount. The valuation of India’s e-commerce market can be projected to hit the US$ 350 billion mark by 2030, serving as a big contributor to India’s aim of a $1 trillion digital economic system. Nonetheless, sure speculative clauses within the proposed rules might hinder sector acceleration, discourage investments, and impede the expansion of small companies. Moreover, these clauses may impression digital and monetary inclusion, that are important priorities for the Authorities.
Legal responsibility, not a fallback
One contentious difficulty is the idea of fallback legal responsibility, which holds e-commerce platforms accountable for faulty or counterfeit merchandise offered by sellers on their platforms. Whereas the 2021 proposed amendments to the patron safety (e-commerce) guidelines launched the fallback legal responsibility clause, the amendments had been later withdrawn as a result of criticism. Reintroducing such a provision may result in complexities, notably when contemplating the Indian market’s desire for a marketplace-only mannequin over an inventory-based one.
As a substitute of imposing a blanket fallback legal responsibility on market e-commerce entities, a extra pragmatic strategy may contain scrapping or limiting the extent of such legal responsibility. As an example, guaranteeing well timed refunds to shoppers in case of non-delivery may very well be an inexpensive compromise. A stringent guidelines of dos and don’ts for onboarding sellers may function a pre-emptive measure to reinforce client safety. Furthermore, e-commerce gamers might be requested to incentivise truthful and clear sellers, fostering a extra accountable ecosystem.
Drawing inspiration from worldwide examples, just like the Store Secure Act 2021 within the USA, a balanced strategy needs to be outlined for Indian rules. The Store Secure Act established contributory trademark legal responsibility for on-line marketplaces primarily based on the sale of counterfeit merchandise by third-party sellers on their platforms. Whereas the laws confronted extreme backlash, primarily from the trade, there was a provision that platforms wouldn’t be held liable if they may exhibit that they took all preventive measures enumerated within the Act. Such balanced approaches have to be clearly outlined for the Indian-based guidelines.
India can implement definitive mechanism whereby the sellers, the platforms and the manufacturers have proportional obligations with out putting the onus on anybody get together. Such a mechanism would foster cooperation and shared accountability, benefiting all stakeholders concerned. However then, this needs to be seen in gentle of to-be-enhanced judicial reforms to make sure speedy client grievance decision. Else the patron grievances will solely pile up.
Cost choices needs to be equitable, not equal
One other vital facet is the necessity to create a stage taking part in discipline for fee mechanisms adopted by e-commerce gamers. Whereas the Authorities’s intent to advertise clean digital transactions is commendable, it’s important to recognise that not all monetary or FinTech gamers possess the infrastructure to course of funds promptly.
This additionally goes towards the goals of presidency’s personal Digital India story, which is to realize “Faceless, Paperless, Cashless” standing. An equitable strategy includes mandating a stage taking part in discipline solely after fintech or banking entities exhibit sure infrastructural high quality requirements. This ensures equity and encourages progress with out demotivating the market, and security in these fee transactions succeeding. Furthermore, collaboration between e-commerce gamers and monetary establishments facilitates income technology, permitting platforms to deal with innovation and platform upgrades. The latest report on “Cyber Safety and Rising Incidence of Cyber Crimes” by the Parliamentary Standing Committee on Finance is a scathing reminder on the need of digital markets adopting requisite monetary fee fashions. The proposed stage taking part in discipline may dilute such a vital suggestion.
Client safety & restrictive insurance policies
To successfully shield shoppers and foster innovation in India’s e-commerce sector, the proposed guidelines should prioritise definitional readability. By eliminating redundant compliances and acknowledging that e-commerce operates on the intersection of digital and bodily realms, the rules can strike a stability between safeguarding shoppers and inspiring development. Understanding the altering social and cultural norms and contemplating the client demographic, primarily the 18-34 age group, is essential whereas drafting e-commerce guidelines. They’re the longer term shoppers for the sellers. To make sure ease of utilization, equity in transactions, and time-bound redressals of any complaints, insurance policies need to create a good discipline.
Strengthening and making On-line Dispute Decision (ODR) mechanisms obligatory will allow shoppers to hunt well timed and efficient resolutions, guaranteeing higher grievance redressal. Moreover, enhancing client consciousness and literacy will play a pivotal function in empowering shoppers to make knowledgeable decisions.
If the rules are seen as anti-global platforms, the market may push buyers away from different industries too. In a yr working upto nationwide elections, this tight rope stroll is required to showcase equity and fairness of e-commerce play for long run sustainable consumption development. Solely by adopting a balanced strategy and contemplating the challenges posed by fallback legal responsibility and preferential fee strategies, India can proceed on its path to turning into a digital powerhouse whereas safeguarding the pursuits of shoppers and selling a thriving digital ecosystem.
Dr. Srinath Sridharan is an creator, coverage researcher, and company adviser