Legal Issues In E-Commerce In India

Legal Issues In E-Commerce In IndiaEstablishment of a successful e-commerce business is not limited to merely putting an idea onto a website. There are many more issues that must be addressed by an e-commerce entrepreneur before his/her e-commerce venture becomes a successful one. These include legal issues as well that range from e-commerce compliances to brand promotion and protection. Even the domain name protection strategy is an essential part of successful e-commerce venture.

E-commerce is one of the most profitable business ventures in India these days. Not only its present growth is good but even its future and projected growth is tremendous. However, e-commerce in India is also required to be conducted in a legally permissible manner.

A dominant majority of e-commerce venture never survive the second year of their establishment. Further, many e-commerce websites are shut down due to legal violations. For instance, many Bitcoins exchanges in India have temporarily suspended their services due to legal uncertainty in this field. Some of them have even been targeted by law enforcement agencies of India for possible violation of Indian laws.

E-commerce websites operating in India are required to follow many laws of India including the Information Technology Act, 2000 (IT Act 2000). As per the IT Act, 2000 these e-commerce websites operating in India are Internet intermediaries and they are required to comply with cyber law due diligence requirements (PDF) as well.

The legal requirements for undertaking e-commerce in India also involve compliance with other laws like contract law, Indian penal code, etc. Further, online shopping in India also involves compliance with the banking and financial norms applicable in India. For instance, take the example of PayPal in this regard. If PayPal has to allow online payments receipt and disbursements for its existing or proposed e-commerce activities, it has to take a license from Reserve Bank of India (RBI) in this regard. Further, cyber due diligence for Paypal and other online payment transferors in India is also required to be observed. M-health laws and regulations in India must be followed by those who wish to explore this upcoming and remunerative field.

With the active use of electronic commerce in India the electronic commerce dispute resolution in India is also required to be strengthened. The present litigation system of India is not conducive for the growth of e-commerce in India and online dispute resolution in India is more appropriate for such purposes.

Finally, for those who wish to engage in cloud computing, virtualisation and other Internet based services in India, they comply with techno legal regulations of India. Cloud computing legal and regulatory requirements in India for businesses and entrepreneurs are still evolving. Nevertheless they must be followed by the cloud computing business community of India. Virtualisation and cloud computing service providers in India must not only follow the encryption laws of India but they must also ensure cyber law due diligence in India. This is more so when the cyber law due diligence for companies in India has become very stringent and foreign companies and websites are frequently prosecuted in India for non exercise of cyber due diligence.

In short, the highly profitable e-commerce segment of India must be explored only after complying with the laws governing the respective e-commerce segment. There is no single set of laws and regulations that govern all e-commerce segments and every e-commerce segment is governed by different laws.