Draft e-commerce policy proposes to regulate cross-border data flow

New Delhi, Feb 23 : The Centre on Saturday released the draft e-commerce policy which proposes the regulation of cross-border flow of data collected by the sector players in India.

The draft policy is now in the public domain for comments and feedback from the stakeholders.

"India's data should be used for the country's development. Indian citizens and companies should get the economic benefits from the monetisation of data," said the draft policy released by the Commerce Ministry's Department for Promotion of Industry and Internal Trade (DPIIT).

All the data collected by the e-tailers in India and stored abroad should not be made available to other business entities outside the country, for any purpose, even with the customer consent, it said.

The data stored abroad "shall not be made available to a third party, for any purpose, even if the customer consents to it; all such data stored abroad shall not be made available to a foreign government, without the prior permission of Indian authorities," as per the policy.

However, the draft policy provides the government the right to access the data of Indian consumers stored abroad.

"A request from Indian authorities to have access to all such data stored abroad, shall be complied with immediately."

The government will also prescribe penal consequences if an online retailer violates the rules.

Restrictions on cross-border flows of data would not apply to data which is not collected in India, business-to-business (B2B) data sent to India as part of a commercial contract between a business entity located outside India and an Indian business entity.

Software and cloud computing services involving technology-related data flows, which have no personal or community implications; and multi-national companies moving data across borders, which is largely internal to the company and its ecosystem would not have to follow the regulations.

As per the policy, domestic industrial standards need to be formulated and facilitated for smart devices and IoT (Internet of Things) devices to meet the goals of the country including, consumer protection, secured transactions, enhanced interoperability and ease-of-user interface.

National standard-setting organisations will be involved in this exercise along with other stakeholders, it said.

Regarding the taxation part, it said that the current practice of not imposing custom duties on electronic transmissions must be reviewed in the light of the changing digital economy and the increased role that additive manufacturing is expected to take.

The FDI policy in e-commerce has been developed in order to ensure that the marketplace provides a level playing field to all participants, it said.

"A situation of capital dumping is to be strongly discouraged."

The new FDI norms, which prohibit the e-tailers from selling products of companies in which they have stakes, came into effect on February 1 despite both Amazon and Walmart seeking a six-month delay in their implementation.



Source: IANS