E-Commerce Laws In India Needed

E-commerce has its origin in foreign jurisdictions especially in developed nations like United States. These jurisdictions have proper laws and adequate infrastructure to cater the needs of e-commerce stakeholders. This has helped these stakeholders in not only complying with the laws of these jurisdictions but also in contributing towards the economy of these jurisdictions.

E-commerce in India is a totally different class. It has all the advantages of profit making and commercial viability but is neither regulated by any dedicated e-commerce law nor is it contributing towards the economic and social growth of India. 

Legal provisions pertaining to foreign direct investment (FDI), foreign exchange management act (FEMA), national taxation laws, cyber law due diligence (PDF), cyber security due diligence, e-commerce due diligence, etc are openly ignored in India. In some instance, enforcement directorate (ED) has also initiated investigation against big e-commerce players like Myntra, Flipkart and many more e-commerce websites operating in India. Many stakeholders have also protested against the unfair trade practices and predatory pricing tactics of Indian e-commerce websites.

The matter has reached to the level of Indian government that has also promised to look into the matter and draft suitable e-commerce law of India, if required. The alternative approach that can be adopted by Indian government is to amend the Information Technology Act, 2000 (IT Act 2000) to accommodate e-commerce related issues.

We at Perry4Law believe that a dedicated e-commerce law of India is urgently required and Indian websites must be suitably regulated. Indian government must also formulate a techno legal framework to take care of complicated technology related legal issues in India. Amending the IT Act 2000 to accommodate e-commerce related issues is not a very good option in this regard and must be the last choice.

Cyber Security Issues Of E-Commerce Business In India

E-commerce business is flourishing at a great speed in India. Most of the e-commerce entrepreneurs are concentrating upon commercial aspects with an eye upon profit motive. In this race they are ignoring techno legal requirements that may affect their rights in the long run.

For instance, e-commerce laws in India are spread across multiple legal frameworks and they are seldom followed by Indian e-commerce stakeholders. Even foreign e-commerce players and portals are required to be registered in India and comply with Indian laws.

Similarly, e-commerce players are required to comply with cyber law and cyber security regulatory compliances in India. A dedicated law for cyber security breaches disclosures is also in pipeline that would impose stringent obligations upon e-commerce players operating in India. Companies that would fail to comply with the cyber law due diligence requirements in India may be punished according to Indian laws.

The cyber security challenges for Indian companies are very difficult to manage in the absence of proper planning and management. Directors of Indian companies and e-commerce websites can be held liable for improper cyber security dealings in India.

Thus, cyber security issues of e-commerce businesses in India cannot be ignored by various stakeholders except at the risk of litigations and heavy monetary compensations.