There are many essential legal formalities for starting e-commerce business in India. These include cyber law due diligence (PDF) and e-commerce due diligence as well. Unfortunately, a majority of e-commerce players, both national and international ones, are not complying with Indian laws pertaining to e-commerce. India has also not formulated a dedicated law for e-commerce that is need of the hour.
Some media reports have informed that India could open up its online retail sector for foreign players very soon. This would allow them to sell their own products instead of using a marketplace model as is presently happening. The industry ministry that drafts FDI rules recently met officials from companies including Amazon, Google, eBay Inc, Wal-Mart and Indian e-retailer Flipkart to finalise the investment guidelines.
This would also help in strengthening of supply chain, infrastructure and selling of cheaper goods in India. This may, in turn, potentially boost consumption and benefit small manufacturers and traders. This may also help in elimination of middlemen, leading to lower transaction, overhead, inventory and labour costs.
Regulatory uncertainty under the previous government had prevented foreign supermarket chains from setting up shop in the country. So far, only Britain’s Tesco PLC has announced an investment.