Internet was first launched in India in 1995 through dial up connection. Ever since then, the Indian e-commerce industry has seen an upward growth. E-commerce has made our life easier by making it possible to get everything with just a few clicks from the convenience our home. In simple terms, e-commerce is a means of conducting business electronically rather than conventional physical means. It is even expected that India will overtake US to become the second largest e-commerce market in the world. E-commerce is an area which is not so old in India. It is emerging constantly with the new developments and demands of the society. E-commerce sites such as Amazon, Flipkart etc. are in great demand in Indian market, so there is a need of a law to safeguard the rights of consumers. Following are some laws and regulations to govern the e-commerce sites in India.
FDI policy – There are two models of e-commerce as defined in Indian foreign direct investment policy:
Marketplace model – This model of e-commerce means providing an information technology platform by an e-commerce sites on a digital and electronic network to act as a medium between buyer and seller. Also, this marketplace acts as a medium for multiple sellers to list their items on the platform and interact with customers. The platform in return charges a commission from the sellers for the service it provides. Amazon and Flipkart are the biggest online marketplace in the Country.
Inventory model – This is a model of e-commerce industry in which an inventory of goods and products are owned directly by an e-commerce site and is sold to customers directly on their behalf. Myntra can be a great example of this model.
As per the FDI policy FDI up to 100% is permitted under automatic route in business-to-business e-commerce. No FDI is permitted in business-to-consumer e-commerce. However, with some exceptions B2C e-commerce is permitted in India.
Payments and Settlements Systems Act, 2007 – According to the Indian law, payment system indicates a system that helps consumers to pay after the product or service is delivered to them. An e-commerce company has to qualify as a payment system by complying with the relevant rules as stated by the RBI related to online payment. Also, it is mandatory for the intermediary party that the receiving party should have a Nodal Account in operating for settling the payments of the merchants on its online e-commerce platform.
Information Technology Act, 2000 and General Data Protection Regulations – It is necessary for e-commerce sites to comply with the rules and regulations of Information technology act. The prime objective of this act was to grant legal recognition to all the transactions done through electronic communication. It facilitates the electronic storage of data and also ensures that the private data of consumers is not misused and kept in safe hands.
E-commerce is still new in India despite its tremendous growth over the years. India has a free-market model and is open for all. The government instructing a company to run in its prescribed way will be against the basic structure of this free model. However, to keep a check on the arbitrary movements of e-commerce sites is also very important. In the coming time, there is definitely going to be a lot of changes in the laws regarding the e-commerce laws in India.
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