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Why the draft e-commerce policy is anti-consumer

A reading of the new e-commerce framework makes it amply clear that if the policy were to be retained as is, and passed, it would be anti-consumer.

twitter-logoGoutam Das | August 3, 2018 | Updated 17:05 IST
Why the draft e-commerce policy is anti-consumer

Over the past couple days, media reports are abuzz with the 'desi' focus of the draft National Policy for e-commerce. It is not yet a "draft" that has been released for comments - it is just a framework that has been circulated among stakeholders for consultations. The draft policy is expected in about a month's time.

A reading of the framework, nevertheless, makes it amply clear that if the policy were to be retained as is, and passed, it would be anti-consumer. Leave alone the fact that some of the points mentioned in the framework doesn't make sense and would be rather complicated to regulate.

Consider the following:

To create a level-playing field between foreign and domestic e-commerce companies, the framework notes that "bulk purchase of branded goods such as electronic products, white goods, branded fashion by related party sellers, which lead to price distortions in a market place would be prohibited".

Second, "The restriction imposed on e-commerce marketplace, to not directly or indirectly influence the price of sale of goods and services, would be extended to group companies of the e-commerce marketplace".

Third, "A sunset clause, which defines the maximum duration of differential pricing strategies (such as deep discounts) that are implemented by e-commerce platforms to attract customers, would be introduced".

Ignore the fact that all the three would end up being a clear case of government overreach. E-commerce platforms, whether Amazon (foreign) or Flipkart (emotionally 'desi'), or anybody else, has given the Indian consumer choice, convenience, and products that are easy on the pocket. There is no monopoly. There are three large and well funded horizontal e-commerce platforms and multiple vertical ones. All the three points listed above, however, would ensure that the products we purchase online are much costlier.

This is bad news for the seller as well - while e-commerce in India is all about discounting, it gives the seller immense geographical reach, and volumes. That's the trade-off.

The framework, if unchanged, is a perfect recipe to stifle the industry's growth. And being anti-consumer to help a handful of new start-ups isn't very pro-'desi'.

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