📰 Sex workers, lawyers seek to amend language of anti-trafficking Bill
Their key demand is that the Bill should explicitly exclude adult persons voluntarily engaged in sex work.
•The anti-trafficking Bill, set to be introduced in the Rajya Sabha, has triggered disquiet among sex workers and lawyers about the proposed law’s potential to criminalise all adult sex work in the absence of a clear distinction between the victims of sexual exploitation or human trafficking and persons who voluntarily opt to provide sex to make a living.
•The National Network of Sex Workers (NNSW) has written to Rajya Sabha Chairman Venkaiah Naidu demanding that the Bill be sent to the Standing Committee of the Upper House. The NNSW has also urged a “meaningful dialogue” with the communities affected by the Trafficking of Persons (Prevention, Protection and Rehabilitation), 2018, Bill.
•Voluntary adult sex work is not illegal in India under certain circumstances, such as when a woman provides the service in her own home without any solicitation. The primary law on trafficking for the purpose of sexual exploitation — the Immoral Traffic (Prevention) Act (ITPA), 1986 — punishes offences including procuring a person for the purpose of prostitution, living on the earnings of prostitution of another person and keeping or using a brothel. But enforcement agencies often conflate trafficking with voluntary sex work and abuse the provisions of the law to evict sex workers from their houses. It is this experience that has stoked fears among sex workers about the new Bill, which is aimed at curbing “physical and other forms of trafficking”; they are urging lawmakers to revisit the language used in the Bill and to ensure that the legislation provides built-in safeguards.
•Their key demand is that the Bill should explicitly exclude adult persons voluntarily engaged in sex work.
•Intervening during the debate on the Bill in the Lok Sabha’s monsoon session — when the Lower House passed it — Women and Child Development Minister Maneka Gandhi had sought to reassure Parliament that the government was opposed to trafficking and not its victims and that any lacunae found in the Bill would be addressed at the time of framing the rules for implementation of the Act.
•Supreme Court lawyer Tripti Tandon said certain offences in the Bill were “clearly directed” at sex workers and that these definitions needed to be reworded to remove all ambiguity. For instance, the provision that makes the advertising and distribution of print and digital content that promotes trafficking of a person as an offence could result in adult sex workers using digital media to promote their services being sent to jail.
‘Must seek consent’
•Sex workers also demand that the consent of a person rescued from trafficking should be a mandatory requirement before a decision is taken to send him or her to a rehabilitation centre. Clause 4 in Section 17 of the Bill, which allows the dismissal of a victim’s application for release “if the Magistrate is of the opinion that such application has not been made voluntarily” has been viewed as a denial of the right to liberty.
•A study titled ‘Raided’ conducted by a sex workers’ group called VAMP (Veshya Anyay Mukti Parishad) and NGO Sangram between 2005 and 2017 traced the lives of 243 “rescued” women after they had been released. As many as 79%, or 193, of these women stated that at the time of the raid they had been in sex work voluntarily and had not wanted to be ‘rescued’.
•“The current trafficking Bill... will become a tool in the hands of law enforcement agencies to victimise and harass sex workers,” said Aarthi Pai, who is among the authors of the study and is a lawyer for the NNSW. “Sex workers, therefore, say the government is wrong in claiming that this Bill will not impact them and demand that they be consulted,” she added.
•Krishnaveni (name changed), a sex worker in her 30s who spent a year at a shelter home in Hyderabad, was the sole bread-winner of her family when she was detained by the police from a railway station.
•“While I was at the home, my daughter reached puberty and was raped by six-seven men; she was in a hospital for a month,” said Ms. Krishnaveni. “There was nobody to help her as my husband himself is physically challenged. My children had to beg and feed him.” Forced to borrow ₹70,000 for the bribes to secure her release, she has since returned to sex work.
•“Families headed by single-women, who provide sex to make a living, are affected when they are sent to a rehabilitation centre,” said S. Jana, a member of a Supreme Court appointed committee to recommend ways to ensure the dignity of life to sex workers.
•The report recommended community-based rehabilitation through a multi-stakeholder board comprising representatives from the sex worker’s community, a doctor, a lawyer and officials of the State government. This body would examine educational, training and employability needs of women and help them access these. The panel recommended a scheme to provide interest free loans to enable a woman to set up a business as well.
•The panel also proposed a slew of measures to ensure dignity of life for those who want to remain in sex work such as providing them a ration card, right to education for their children as well as crèches and day-time and night-time care centres.
•The panel called detention in shelters “one of the worst human rights violations” and recommended that even when victims of trafficking were being rescued it was important to let them choose whether they wanted to reunite with their families or preferred community-based rehabilitation.
•The recommendations submitted to the Central government through the Supreme Court don’t find any mention in the proposed law.
•Activists said that while the law focusses a lot on surveillance and policing, there is very little in terms of the welfare of a survivor of trafficking apart from the provision of her rehabilitation in a shelter, and these are also weak.
•“Some of the positive provisions in ITPA are omitted in the new Bill,” said Ms. Tandon. “For instance, under ITPA the magistrate has to look into the background of the rescued persons, which is missing from the present Bill. Secondly, ITPA provides a time period for which a person can be sent to a rehabilitation centre — an interim custody of 21 days until the police prepares its report and a final custody of 1-3 years. But in the Bill there is no time-frame and it says that the magistrate can send a person for rehabilitation for a reasonable period. And there is no review available for this. This means one could be in detention forever.”
•The Bill also doesn’t provide a mechanism to ensure monitoring and accountability of shelter homes or revocation of licences or punishment for those running the centres in case of non-compliance.
•“Partnership between sex workers and anti-human trafficking units to root out exploitative practices is essential,” said Ms. Pai. This is a model that activists cite as success stories such as in the country’s largest red-light district of Shonagachi in West Bengal where a self-regulatory body of sex workers operating since 2001 helps in tracking entry of minors and in identifying traffickers. This model has also been emulated in Sangli in Maharastra where the anti-human trafficking unit has collaborated with VAMP to rescue minors and prevent trafficking.
📰 Being a good neighbour
India must shed its zero-sum style foreign policy-making, and work towards South Asian integration
•If South Asia is one of the world’s least integrated regions, India is one of the world’s least regionally-integrated major powers. While there indeed are structural impediments (posed by both India and its neighbours) in fostering regional integration, the most significant handicap is New Delhi’s ideational disinclination towards its neighbourhood. Successive regimes have considered the neighbourhood as an irritant and challenge, not an opportunity. Seldom have India’s policies displayed a sense of belonging to the region or a desire to work with the neighbourhood for greater integration and cooperation. Today, we have become even more transactional, impatient and small-minded towards our neighbourhood which has, as a result, restricted our space for manoeuvre in the regional geopolitical scheme of things.
At a critical juncture
•Whichever way one looks at it, India’s neighbourhood policy is at a critical juncture: while its past policies have ensured a steady decline in its influence and goodwill in the region, the persistent absence of a coherent and well-planned regional policy will most definitely ensure that it eventually slips out of India’s sphere of influence. India’s foreign policy planners therefore need to reimagine the country’s neighbourhood policy before it is too late.
•The Narendra Modi government’s neighbourhood policy began exceptionally well with Mr. Modi reaching out to the regional capitals and making grand foreign policy commitments. But almost immediately, it seemed to lose a sense of diplomatic balance, for instance, when it tried to interfere with the Constitution-making process in Nepal and was accused of trying to influence electoral outcomes in Sri Lanka. While India’s refugee policy went against its own traditional practices, it was found severely wanting on the Rohingya question, and seemed clueless on how to deal with the political crisis in the Maldives. Despite their characteristic bravado and grandstanding, the BJP government’s foreign policy mandarins looked out of their depth.
•While it is true that 2018 seems to have brought some good news from the regional capitals, it has less to do with our diplomatic finesse than the natural course of events there. The arrival of an India-friendly Ibrahim Mohamed Solih regime in Male has brought much cheer, and the return of Ranil Wickremesinghe as Sri Lankan Prime Minister is to India’s advantage too. Nepal has reached out to India to put an end to the acrimony that persisted through 2015 to 2017. Bhutan, Myanmar and Bangladesh are also positively disposed towards India, though the relationship with Pakistan continues to be testy and directionless. What this then means is that New Delhi has a real opportunity today to recalibrate its neighbourhood relations.
Lessons from the past
•First, let’s briefly examine what should not be done in dealing with a sensitive neighbourhood. For one, India must shed its aggression and deal with tricky situations with far more diplomatic subtlety and finesse. The manner in which it weighed down on Nepal in 2015 during the Constitution-making process is an example of how not to influence outcomes. The ability of diplomacy lies in subtly persuading the smaller neighbour to accept an argument rather than forcing it to, which is bound to backfire.
•Second, it must be kept in mind that meddling in the domestic politics of neighbour countries is a recipe for disaster, even when invited to do so by one political faction or another. Preferring one faction or regime over another is unwise in the longer term. Take the example of incumbent Sri Lankan President Maithripala Sirisena. There was a great deal of cheer in New Delhi when he took office in January 2015 (with some saying India helped him cobble together a winnable coalition) after defeating Mahinda Rajapaksa, considered less well disposed toward India. However, Mr. Sirisena’s political transformation was quick, as were India’s fortunes in Colombo, at least temporarily.
•Third, New Delhi must not fail to follow up on its promises to its neighbours. It has a terrible track record in this regard.
•Fourth, there is no point in competing with China where China is at an advantage vis-à-vis India. This is especially true of regional infrastructure projects. India simply does not have the political, material or financial wherewithal to outdo China in building infrastructure. Hence India must invest where China falls short, especially at the level of institution-building and the use of soft power. However, even in those areas China seems to be forging ahead. India must therefore invest a great deal more in soft power promotion (and not the Hindutva kind of outreach). To begin with, India could expand the scope and work of the South Asian University (SAU), including by providing a proper campus (instead of allowing it to function out of a hotel building) and ensuring that its students get research visas to India without much hassle. If properly utilised, the SAU can become a point for regional integration.
Looking for convergence
•Finally, while reimagining its neighbourhood policy, New Delhi must also look for convergence of interests with China in the Southern Asian region spanning from Afghanistan to Nepal to Sri Lanka. There are several possible areas of convergence, including counter terrorism, regional trade and infrastructure development. China and India’s engagement of the South Asian region needn’t be based on zero-sum calculations. For example, any non-military infrastructure constructed by China in the region can also be beneficial to India while it trades with those countries. A road or a rail line built by China in Bangladesh or Nepal can be used by India in trading with those countries.
•Going forward, New Delhi must invest in three major policy areas. There needs to be better regional trading arrangements. The reason why South Asia is the least integrated region in the world is because the economic linkages are shockingly weak among the countries of the region. The lead to correct this must be taken by India even if this means offering better terms of trade for the smaller neighbours. While it is true that long ‘sensitive lists’ maintained by South Asian countries are a major impediment in the implementation of SAFTA, or the South Asian Free Trade Area, India could do a lot more to persuade them to reduce the items on such lists. Second, several of India’s border States have the capacity to engage in trading arrangements with neighbouring counties. This should be made easier by the government by way of constructing border infrastructure and easing restrictions on such border trade.
Resurrect SAARC
•Second, India prefers bilateral engagements in the region rather than deal with neighbours on multilateral forums. However, there is only so much that can be gained from bilateral arrangements, and there should be more attempts at forging multilateral arrangements, including by resurrecting the South Asian Association for Regional Cooperation (SAARC).
•Third, India must have a coherent and long-term vision for the neighbourhood devoid of empty rhetoric and spectacular visits without follow up. We must ask ourselves, as the biggest country in the South Asian neighbourhood, what kind of a region do we want to be situated in, and work towards enabling that.
📰 Another olive ridley nesting site soon
Beach at Bahuda river mouth in Odisha being developed to lure the turtles
•The Odisha forest department is all set to add another olive ridley mass nesting site to its wildlife map.
•It has started preparing the beach at the Bahuda river mouth in Ganjam district to lure the endangered turtles to come over for mass nesting next year.
•Around 3-km stretch of the beach from Sunapur to Anantpur at Bahuda rookery is being developed as a possible olive ridley mass nesting site. The Bahuda rookery is located around 20 km to the south of Rushikulya rookery coast, a major mass nesting site of olive ridleys on the Indian coastline.
•Berhampur Divisional Forest Officer Ashis Behera said the Bahuda rookery coast has been cleaned up once already and it will be thoroughly cleaned up again before the start of the mass nesting season in February. "The forest department has decided to fence off around 2-km stretch of the beach near Bahuda river mouth to protect the turtles during the nesting season,” the DFO said.
Encouraging signs
•This year, a few hundred olive ridleys had nested at Bahuda river mouth in February. This encouraged the forest department to develop it as a second mass nesting site for the turtles on the Ganjam coast. At present, mating olive ridleys are being sighted near the Bahuda rookery. It is being hoped that the turtles will find the beach conducive and their mass nesting number at Bahuda will increase in 2019.
•Marine fishermen in the area have been requested to refrain from using gill nets during fishing as that can kill the turtles. Fishermen near Rushikulya rookery do not use such nets. With the support of local residents, efforts are being made to reduce polythene pollution caused by tourists and picnickers at Bahuda river mouth to keep the sand clean for mass nesting.
•Local fishermen say around two decades ago thousands of olive ridleys used to nest at Bahuda coast, which for some reason diminished with time.
📰 TV services will not be affected, says TRAI on new broadcasting rules
‘New regulatory framework allows consumers to select and pay only for the channels they wish to view’
•The Telecom Regulatory Authority of India (TRAI) on Wednesday clarified that customers will not face any disruption of their TV services due to implementation of its new regulatory framework for broadcasting and cable services.
•The new framework, which comes into force from December 29, allows consumers to select and pay only for the channels they wish to view, and requires the TV broadcasters to disclose maximum retail price of channels individually as well as of bouquets.
•“The Authority has noticed that there are messages circulating in the media that there may be a black-out of existing subscribed channels on TV screens after December 29. The Authority is seized of the matter and hereby advises that all Broadcasters/DPOs/LCOs will ensure that any channel that a consumer is watching today is not discontinued on 29.12.2018,” a TRAI statement said.
Migration plan
•Keeping in view the interest of the subscribers and to enable a smooth transition, the Authority is preparing a detailed Migration Plan for all the existing subscribers.
•“The migration plan will provide ample opportunity to each and every subscriber for making an informed choice. This will also enable service providers in carrying out the various activities as stipulated in the new regulatory framework in a time-bound manner,” it said.
•The Authority maintained that the cost to consumers will not increase. “Further, if a consumer carefully chooses channels of his choice for complete requirement of a family, the amount payable by him may be even less than the present payments being made per month. Some of the probable packs in different markets have been compiled by TRAI.”
•“Further some broadcasters with wider presence have reduced the price of their channels recently. The published prices as declared by broadcasters are offered prices and not the final market determined prices. The Authority expects the market forces to stabilise the prices soon based on economic principles,” it said.
•The TRAI, in its FAQs on the new norms, has reasoned that after digitization of cable TV networks in March 2017, there was an urgent need to improve transparency as many stakeholders were not providing choice to consumers. It said the consumer becomes the real decision-maker now.
•Additionally, the framework stipulates a network capacity fee with upper ceiling of ₹130 for 100 channels. Network capacity fee for 100 channels includes Free to Air channels or Pay channel or combination thereof. Taking FTA channels is the choice of subscriber but not mandatory except the mandatory channels of MIB. If Subscriber chooses pay channels, applicable MRP is payable in addition to the network capacity fee.
•Any subscriber who opts for more than 100 channels — a rare choice of less than 10-15 % consumers, according to TRAI — can choose additional channels in each slab of 25 channels with at a maximum price of ₹20 per slab. The new framework stipulates that the subscribers will not be pushed with unwanted channels; rather she/ he will have freedom to choose only those TV channels that they want to see and pay accordingly, Trai said, adding that 80% subscriber as per the viewing pattern given by BARC, either view or flip 40 or less number of channels.
📰 No lessons learnt: on Meghalaya mining disaster
The Meghalaya mining disaster exposes a series of administrative lapses
•The disaster that struck a coal mine at Ksan in Meghalaya’s Jaintia Hills district on December 13, trapping at least 13 workers, is a shocking reminder that a fast-growing economy such as India continues to allow Dickensian mining practices. India being home to some of the worst mine disasters, such as Chasnala near Dhanbad in 1975 in which more than 370 people were killed, the full spectrum of mining activity should be tightly regulated. Yet, the Ksan mine, referred to as a rat hole, was allowed to function in violation of not just safety norms but a complete prohibition issued by the National Green Tribunal. Clearly, the administration did not act to stop unscrupulous operators of the illegal mine from exploiting desperate workers, some of them from Assam, who were willing to work the rat hole tunnels because that is the most remunerative employment available to them. Unscientific mining led to a collapse of the chamber and deadly flooding followed. After disaster struck, it was incumbent on the Meghalaya government to launch an immediate rescue effort. But it did not possess the equipment to dewater the stricken mine quickly, and did not show any urgency in requisitioning it from elsewhere, in spite of the involvement of the National Disaster Response Force. The families of the workers are now left hoping for a miracle. Meghalaya has no excuse for not closing down such dangerous mines. What it can and should do now, jointly with the Assam government where needed, is to offer adequate compensation and jobs for the next of kin of the workers without delay.
•Official inquiries into flooding disasters at approved mines, including Chasnala, have shown serious shortcomings in safety management. Two years ago, a landslip at an open cast mine in Goda, Jharkhand, killed 23 people, raising questions about the rigour of the technical assessment done prior to expansion of extraction activity. A study on three big flooding accidents published in 2016 by the IIT-Indian School of Mines, Dhanbad, concluded that the official approach of fixing responsibility on human error was flawed, since it did not try to identify the root cause. There is little evidence to show that pre-mining surveys and safety protocols are incorporating such advice. The case of illegal mines falls in a different category. Unapproved work, which appears to have led to the Meghalaya accident, cannot continue, and employment should be provided to those who are displaced. Illegal mining has been highlighted by activists, but they have become targets of violence by those operating the mines. In the glare of national attention, Chief Minister Conrad Sangma has acknowledged that illegal mining does take place. His government has been remiss as it failed to act on the NGT’s directions. It must bear responsibility for what has happened at Ksan, and work to prevent such tragedies.
📰 The shape of growth matters
Some recommendations in NITI Aayog’s ‘Strategy for New India @ 75’ are a cause for concern
•While there are many refreshing improvements in NITI Aayog’s ‘Strategy for New India @ 75’ from the erstwhile Planning Commission’s plans, there are also concerns about some of the strategies recommended.
•The intent to change the approach to planning from preparations of plans and budgets to the creation of a mass movement for development in which “every Indian recognises her role and experiences the tangible benefits” is laudable. The strategy affirms that “policymaking will have to be rooted in ground realities” rather than economic abstractions. It says that stakeholders have been consulted widely in preparing the strategy, which is also something that the erstwhile Planning Commission said. However, what matters is the quality of consultations. It will be worthwhile for NITI Aayog to get feedback from stakeholders on whether it has improved the process of consultation substantially or not.
•The strategy emphasises the need to improve implementation of policies and service delivery on the ground, which is what matters to citizens. Its resurrection of the 15 reports of the Second Administrative Reforms Commission and recommendation that they must be implemented vigorously are welcome. The previous government had taken its eye off the ball. It did not put its weight behind the implementation of these well-thought-out recommendations, which had the endorsement of all political parties, by a Commission it had supported.
The meaning of growth
•Employment and labour reforms, the second chapter in the strategy, have rightly been given the highest priority, which was not the case in the previous plans. Overall growth is also emphasised by NITI Aayog: “Besides having rapid growth, which reaches 9-10 per cent by 2022-23, it is also necessary to ensure that growth is inclusive, sustained, clean and formalised.” However, it is the shape of growth that matters more than size. The employment-generating capacity of the economy is what matters more to citizens than the overall GDP growth rate. There is no joy for citizens if India is the fastest-growing economy and yet does not provide jobs and incomes.
•The growth of industry and manufacturing is essential to create more employment, and to provide bigger opportunities to Indians who have been too dependent on agriculture so far. Here, too, it is not the size of the manufacturing sector that matters but its shape. Labour-intensive industries are required for job creation. If the manufacturing sector is to grow from 16% to 25% of the GDP, which the strategy states as the goal, with more capital-intensive industries, it will not solve the employment problem. The strategy does say that labour-intensive industries must be promoted, but the overall goal remains the size of the sector. What one measures, one manages. Therefore, the goal must be clearly set in terms of employment, and policies and measurements of progress set accordingly. Indian statistical systems must be improved quickly to measure employment in various forms, formal as well as informal.
•The strategy highlights the urgency of increasing the tax base to provide more resources for human development. It also says financial investments must be increased to strengthen India’s production base. Managing this trade-off will not be easy. If tax incentives must be given, they should favour employment creation, not more capital investment.
•A big weakness in the Indian economy’s industrial infrastructure is that middle-level institutions are missing. Rather than formalising small enterprises excessively, clusters and associations of small enterprises should be formalised. Small enterprises cannot bear the burden of excessive formalisation — which the state and the banking system need to make the informal sector ‘legible’ to them. Professionally managed formal clusters will connect the informal side of the economy with its formal side, i.e. government and large enterprises’ supply chains. NITI Aayog’s plan for industrial growth has very rightly highlighted the need for strong clusters of small enterprises as a principal strategy for the growth of a more competitive industrial sector.
Reorienting labour laws
•The strategy on labour laws appears pedestrian compared with the ambitious strategy of uplifting the lives of millions of Indians so that they share the fruits of economic growth. It recommends complete codification of central labour laws into four codes by 2019. While this will enable easier navigation for investors and employers through the Indian regulatory maze, what is required is a fundamental reorientation of the laws and regulations — they must fit emerging social and economic realities. First, the nature of work and employment is changing, even in more developed economies. It is moving towards more informal employment, through contract work and self-employment, even in formal enterprises. In such a scenario, social security systems must provide for all citizens, not only those in formal employment. Indeed, if employers want more flexibility to improve competitiveness of their enterprises, the state will have to provide citizens the fairness they expect from the economy. The NITI Aayog strategy suggests some contours of a universal social security system. These must be sharpened.
•Second, in a world where workers are atomised as individuals, they must have associations to aggregate themselves to have more weight in the economic debate with owners of capital. Rather than weakening unions to give employers more flexibility, laws must strengthen unions to ensure more fairness. Indeed, many international studies point out that one of the principal causes of the vulgar inequalities that have emerged around the world is the weakening of unions. The NITI Aayog strategy mentions the need for social security for domestic workers too. This will not be enforceable unless domestic workers, scattered across millions of homes, have the means to collectively assert their rights.
•Third, all employers in India should realise that workers must be their source of competitive advantage. India has an abundance of labour as a resource, whereas capital is relatively scarce. Human beings can learn new skills and be productive if employers invest in them. Employers must treat their workers — whether on their rolls or on contract — as assets and sources of competitive advantage, not as costs.
•The shape of the development process matters more to people than the size of the GDP. Development must be by the people (more participative), of the people (health, education, skills), and for the people (growth of their incomes, well-being, and happiness). How well India is doing at 75 must be measured by the qualities of development, as experienced by its citizens, along these three dimensions. GDP growth will not be enough.
📰 Russia ‘successfully’ tests hypersonic missile
The final test comes after U.S. President Donald Trump announced plans to pull out of a key Cold War-era nuclear weapons pact,
•Russian President Vladimir Putin on Wednesday hailed final tests of a hypersonic missile, which he had earlier said would render existing missile systems obsolete.
•“On my instructions, the Ministry of Defence prepared and conducted a final test of this system. This has just been completed with absolute success,” Mr. Putin said, during a televised meeting with members of the government.
•“Russia has a new type of strategic weapon,” he said, adding that the intercontinental “Avangard” system would be ready for use from 2019. The Kremlin told Russian news agencies the test had taken place in far eastern Kamchatka.
•Mr. Putin had unveiled features of the Avangard during his annual address in March, which he said would be part of a new generation of “invincible” weaponry. The hypersonic missile could fly at 20 times the speed of sound and manoeuvre up and down, meaning that it could breach defence systems, he had said at the time.
•The final test comes after U.S. President Donald Trump announced plans to pull out of a key Cold War-era nuclear weapons pact, the three-decade-old Intermediate-Range Nuclear Forces Treaty (INF). Mr. Putin has laid out plans to develop missiles banned under the deal if the U.S. abandons it.
📰 Centre tightens rules for selling online
E-commerce firms cannot hold stake in, or control vendor selling through its platform
•The government on Wednesday said e-commerce companies would be barred from selling products sourced from firms in which they have stake in or control over.
•This is a clarification issued by the Ministry of Commerce regarding the Consolidated FDI Policy Circular 2017. “100% FDI under automatic route is permitted in marketplace model of e-commerce,” the Commerce Ministry said. “FDI is not permitted in inventory-based model of e-commerce.”
Definition of control
•The inventory-based model of e-commerce is when the inventory of goods and services is owned by the e-commerce entity and sold to consumers directly. The marketplace model is when an e-commerce company simply provides an information technology platform in order to act as a facilitator between the buyer and the seller. “E-commerce entity providing a marketplace will not exercise ownership or control over... goods purported to be sold,” the Ministry added. “Such an ownership or control over the inventory will render the business into inventory-based model. Inventory of a vendor will be deemed to be controlled by e-commerce marketplace entity if more than 25% of purchases of such vendor are from the marketplace entity or its group companies.”
•From the point of view of the vendor too, the clarification said that an entity with equity stake owned by an e-commerce marketplace entity or its group companies, or having control on its inventory by e-commerce marketplace entity or its group companies, will not be permitted to sell its products on the platform run by such marketplace entity.
•“In addition to the restrictions prescribed under the existing FDI policy, the DIPP clarification now states that inventory of a vendor will be deemed to be controlled by e-commerce marketplace entity if more than 25% of purchases of such vendor are from the marketplace entity or its group companies,” Atul Pandey, partner, Khaitan & Co. said.
•The clarification also said an e-commerce marketplace will not force any seller to sell any product exclusively on its platform. “This clarification is targeted at plugging loopholes in the earlier policy,” Mr. Pandey added. “E-commerce marketplace entity will be required to furnish a certificate along with a report of statutory auditor to Reserve Bank of India, confirming compliance of the guidelines, by September 30 every year for the preceding financial year,” he said.
