India's e-commerce policy like to face delay amid global trade shifts: Report

Key concerns such as data privacy, marketplace liabilities, and FDI rules for e-commerce players remain unresolved

India’s long-awaited comprehensive e-commerce policy, which has garnered significant interest from global players like Amazon and Walmart, may be delayed further as the government reassesses priorities in light of evolving geopolitical developments, two people aware of the matter told Mint.

“It is not the right time to proceed with the release of the e-commerce policy, given the changing global geopolitical scenario,” one of the sources told Mint. “With trade dynamics shifting and uncertainties looming, we need to carefully assess the potential impact before moving forward,” they added.

The Department for Promotion of Industry and Internal Trade (DPIIT), responsible for drafting the policy in collaboration with the Department of Consumer Affairs, is proceeding cautiously, considering the broader implications of any regulatory move, Mint reported.

The delay comes as India recalibrates its strategy following Washington’s increasingly protectionist stance under the Donald Trump administration. The government is prioritizing broader trade negotiations and strategic partnerships before implementing new regulations in the e-commerce sector.

The proposed policy aims to tighten rules on data governance, competition, and consumer protection while creating a fair and competitive marketplace. However, foreign e-commerce giants have resisted certain provisions, particularly those concerning foreign direct investment (FDI) restrictions, data localization mandates, and increased compliance requirements.

Originally expected to be announced in 2023, the policy has faced repeated delays. The final round of stakeholder consultations took place in August 2023, but there has been little progress since then. Currently, India’s e-commerce sector is regulated by multiple government entities, including the Ministries of Consumer Affairs, Electronics and Information Technology (MeitY), and Commerce, each overseeing different aspects such as consumer protection, data governance, and trade practices.

Key concerns such as data privacy, marketplace liabilities, and FDI rules for e-commerce players remain unresolved, Mint added.

Queries sent to DPIIT, the Prime Minister’s Office, the Ministries of Commerce and Consumer Affairs, Amazon, and Flipkart remained unanswered. Moneycontrol could not independently verify the report. In response to an emailed query, a spokesperson for the U.S. Embassy suggested directing questions on policy matters to the Indian government.