Australia calls India's draft e commerce rules 'detrimental to trade': Report
- The draft e-commerce rules were published on June 28
- The rules aim to regulate online marketplaces
- Australia says that the draft rules are intrusive and detrimental to trade
The Indian government’s draft e-commerce rules drawn up by the Department of Consumer affairs has not only seen a sharp pushback domestically but is now drawing flak from several international trade bodies as well as the Australian government. The trade bodies and the Australian government feel that India’s draft e-commerce rules are intrusive and detrimental to trade. The draft rules published on June 28 tighten the regulation on online marketplaces.
The Australian government, which is currently in the process of negotiating a trade deal with India, has put in a dedicated chapter on e-commerce on the agreement and has written to the Department of Consumer affairs pointing out that the new rules would “impose extensive extraterritorial obligations on foreign e-commerce entities operating in India,” reports The Indian Express.
What are the new draft e-commerce rules?
The draft e-commerce rules include provisions to make registration mandatory for e-commerce entities with the Department of Promotion for Industry and Internal Trade (DPII). Flash sales by e-commerce platforms have been limited and e-commerce sites have been asked to ensure appointment of compliance officers.
However, two of the most contentious rules are the rules restricting related parties and the rules on fall back liability.
The rules restricting related parties are aimed at tackling concerns of preferential treatment. The new rules propose to ensure that none of the related parties are allowed to use any consumer information to get an unfair advantage. Further, none of the e-commerce entities related parties can be enlisted as sellers.
Meanwhile, the rules regarding fall back liability make e-commerce firms liable in case a seller on their platform fails to deliver goods or services due to negligence.
Why is Australia opposing India’s draft e-commerce rules?
The Australian government, which is currently negotiating a trade deal with India has said that it finds the proposed amendments overly prescriptive and may increase trade barriers, particularly for small and medium enterprises. A copy of this submission and inputs submitted by other stakeholders were obtained by the Indian Express under the Right to Information Act.
Media reports further indicate that several government departments including the Department for Promotion of Industry and Internal Trade, the Niti Aayog, the Ministry of Corporate Affairs, the Ministry of Finance and the Ministry of Electronics and Information Technology have opposed certain sections of the new e-commerce rules.