E-com norms can affect global investor sentiment: IACC
In its letter, IACC said certain proposed provisions around flash sales, cross-selling, etc defeat the premise of a level playing field between offline and online retail by creating an additional later of complexities for online retail
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The proposed e-Commerce regulations could increase compliance liabilities, affect global investor sentiment with respect to ease of doing business (EoDB) in the country, and severely impair growth of the online commerce sector, according to Indo-American Chamber of Commerce (IACC). In a letter to the Department of Consumer Affairs Joint Secretary Anupam Mishra, IACC, said e-Commerce was a sunrise sector with immense growth opportunities.
e-Commerce has provided choice and convenience to consumers, given unparalleled access to small traders and MSMEs (Ministry of Micro, Small & Medium Enterprises), generated massive employment and has had a multiplier effect on allied ecosystems like logistics and payments.
"However, the proposed amendments to the Consumer Protection (E-Commerce) Rules, 2020, that are envisioned to protect consumer interests, may further compound the impact of a multiplicity of regulations on the e-commerce sector by increasing compliance liabilities that risk severely impairing the growth of the sector," IACC said in its letter dated July 2. IACC further stated that such a measure will affect investor sentiment globally, especially with respect to ease of doing business in the country. The industry body highlighted some of the provisions under the proposed guidelines that "may impinge on the business operations" of e-commerce companies, while some others are covered in other regulatory formats. IACC said the provision of fallback liabilities for e-commerce marketplaces is uncalled for and such liability should be for sellers, especially as e-commerce entities hold no control over inventory under the marketplace model. "...such a provision is likely to impact smaller e-commerce companies that will feel the brunt of these liabilities, inhibiting their growth," it added. In its letter, IACC said certain proposed provisions around flash sales, cross-selling, etc defeat the premise of a level playing field between offline and online retail by creating an additional later of complexities for online retail. The association also emphasised that "having principal-based light-touch regulations in place of stringent definitions as the amendments propose is a better approach to undertake". While protecting the interests of consumers is of paramount importance, at the same time regulatory action should not stifle the growth of the sector, which would ultimately hurt the interest of the consumer, as well as small sellers, retailers, logistics .
