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Government is trying to set rules for the e-commerce sector

The proposed amendments to e-commerce rules have stirred a hornet’s nest. While different ministries have expressed divergent views on the subject, the industry players too had different views on the changes suggested. Now, according to a report in The Economic Times, the Prime Minister’s Office will “weigh in on consultations the consumer affairs ministry is having with various stakeholders”.

The report quoted an unnamed official as saying that PMO’s efforts will be to develop a consensus among several government arms on the proposed changes.

The draft guidelines on amendments seek to make rules stricter for ecommerce marketplaces. The proposals include banning affiliated entities from selling on their platforms, and restricting flash sales that offer discounts or promotions, said the report.

The Consumer Protection (E-Commerce) Rules, 2020 were notified in July 2020.

Divergent views

The Department of Consumer Affairs has been holding detailed discussions with various companies and industry associations on the amendments proposed.

Industry bodies representing the Tatas, Amazon and Flipkart and others have opposed some of the clauses. The finance ministry and the ministry of corporate affairs too are not in favour of some of the provisions. The finance ministry had said some changes proposed can adversely impact the e-commerce and allied sectors. The Ministry of Corporate Affairs does not want it impinge on competition issues.

Niti Aayog had said proposed amendments sent out a message of unpredictability in policymaking.

Why are changes needed?

The amendments to the existing Consumer Protection (E-Commerce) Rules have been proposed after the Ministry received several complaints of cheating and unfair trade practices in the e-commerce ecosystem. To address the distress of the concerned stakeholders, the Ministry proposed certain changes to the existing Rules.

The proposed amendments aim to protect the interest of consumers and encourage free and fair competition in the market.

The e-commerce sector is expected to grow to $188 billion by 2025 from $64 billion in 2020, according to estimates by accounting and advisory firm Grant Thornton.