Regulators

TRAI ready to consider proposal for e-commerce but says it is already over-burdened

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NEW DELHI: With more and more people depending on their computers and smart phones to transact business transactions and transfer money, the Government appears to have woken up to the need for someone to regulate this.

 

While confirming this, a source in the Telecom Regulatory Authority of India (TRAI) told indiantelevision.com that the role of the regulator had remained confined to telecom until 2004 when it was asked to also look into issues relating to broadcasting and had later drawn up regulations relating to telemarketing following complaints by telecom consumers about mobile calls.

 

The need for an e-commerce regulator was felt after the Confederation of All India Traders (CAIT) sought the Commerce Ministry’s intervention over ‘predatory pricing’ strategies of e-tailers during festival sales last year. It asked the government to set up a taskforce to “probe into the working and business model of e-commerce companies” and to set up a regulatory authority to monitor the business.

 

The source said TRAI will consider the proposal but will have to consider that it is already burdened with issues like spectrum e-auction and the digital addressable system for cable television.

 

Now, an inter-ministerial panel has requested the Authority to take up the role or suggest if there is a need for a separate regulator for e-commerce. The panel has sought an update from the Consumer Affairs Ministry on measures taken to introduce online dispute resolution in e-commerce.

The inter-ministerial panel will prepare a paper, sought by the Data Security Council of India, on imposing restrictions on the location of servers and on getting companies like Google and Amazon to set up data centres in India.

The Department of Industrial Policy and Promotion has informed the committee there is no plan to change the foreign direct investment (FDI) policy in e-commerce. The Department is understood to have said there was no lack of clarity in the FDI policy for e-commerce. If required, the Department noted, issues related to e-commerce funding and operations could be addressed by formulating guidelines for the sector rather than by modifying the FDI policy.

Last month, the DIPP had suggested up to 49 per cent FDI in consumer e-commerce following representations by several US companies. FDI is barred in e-commerce companies selling directly to consumers and there are restrictions on sourcing from local manufacturers. The DIPP also suggested a mechanism to facilitate US investments in India after Amazon, which has invested about $300 million in India, sought the government’s approval for further investments.

Foreign e-commerce companies are allowed to operate as online marketplaces. FDI of up to 100 per cent is permitted in business-to-business e-commerce.

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