eCommerce in India is growing very fast compared to previous some years. Since then, sellers and suppliers in India are still not confident about the online security & protection. Actually, they don’t know what does India has eCommerce laws and regulations. In this writing, I will concise all the important eCommerce laws and regulations in India for Sellers and Suppliers.
According to a recent report, a number of online buyers in India were 50 million in 2015 and it is estimated at 320 million by 2020. All thanks to the new age technology and smartphones by which purchasing anything online is just a click away!
So, after the popularity of eCommerce marketplaces, the Indian government issued some eCommerce laws and regulations to prevent any kind of online fraud, cyber crimes, and provide the safeguard to the consumers.
For easy understanding, these eCommerce laws and regulations in India are divided into different categories. Let’s start to know these eCommerce laws and regulations and be confident about starting your eCommerce business.
Privacy and protection act:
The Information Technology act, 2008 (IT Act) regulates the transactions through eCommerce platform and guarantees the privacy and data protection.
- 1. The IT act provides the secure electronics record and secure electronic signature.
- 2. Section 66C of the IT Act imposes a penalty in the case of identity theft, dishonestly makes use of an electronic signature, password or other credential assets.
- 3. The person with guilty may be liable for the imprisonment of either three years of jail or one lakh rupees or both may be imposed.
- 4. Section 84A of IT act confirms the secure use of electronics medium and the promotion of eCommerce and eGovernance.
- 5. Data protection under the Section 43A of IT Act enumerates compensation in case of failure of data privacy and protection.
- 6. The compensation may not exceed five crore rupees to the affected person.
Competition law act:
The Competition act, 2002 was enacted to prevent the activities that have an adverse effect on competition in India.
- 1. This law as a tool is to prevent and punish anti-competitive business practices by firms and unnecessary government interference in the market.
- 2. The Competition law provides the opportunity to the entrepreneur for the competition in the market.
- 3. Competition Commission of India (CCI) ensures the fair marketing practices. Also, prevent from anti-competition practices and to promote a fair and healthy competition in the market.
- 4. This act keeps eyes on the market and to ban the abusive situation of the market monopoly.
Payment and settlement system regulations Act, 2007/ 2008:
The payment and settlement system Act, 2007, deals with all the regulatory aspects pertaining to payment systems in India. This Act empowers the Reserve Bank of India to serve this purpose.
- 1. Any person or entity who wishes to set up a payment system has to adhere to the provisions of the Payment and settlement system regulations Act, 2008.
- 2. Every effort is made by RBI to ensure that the application for obtaining the authorization certificate is finalized within six months from the date of filing such application.
Intellectual property related issues:
Since the valuable intellectual property (IP) in the form of updated technology, branding, design, software, and other material - it is absolutely essential for such entities to understand their IP rights and ownership status.
- 1. IP violation is a common concern for eCommerce businesses as it is difficult to monitor violations globally.
- 2. To protect online businesses against anonymous IP infringers, Indian law allows companies to seek ‘John Doe’ orders.
- 3. This provision allows a company to protect its possible IP loss due to copying and publishing against an unknown person.
- 4. Also, India has established a ‘Cyber cell’ under its police department to tackle issues related to cybersecurity.
FDI eCommerce laws and regulations:
Foreign direct investment (FDI) is complex in India. Up to 100 percent under the automatic route is permitted in B2B firms. But FDI in B2C for eCommerce firms is permitted only under certain circumstances.
A ‘marketplace’ B2C model is only a facilitator and is inventory-less that it sells. While B2B model is an inventory-based.
In addition to, these two conditions apply:
- 1. Companies must not have more than one vendor account for more than 25 percent of sales on their marketplace, and
- 2. Companies must not directly or indirectly influence the sale price of goods.
Hence, before starting your eCommerce business, you must have read all these eCommerce laws and regulations in India.
Also, let me know by putting your words below in the comment section if any eCommerce laws and regulations in India for Sellers and Suppliers are not in this list.