Understanding Electronic Commerce

In India

Abstract The swift expansion of e-commerce in India has given rise to numerous
legal issues that require careful consideration and comprehension. This research paper
explores the legal landscape surrounding e-commerce in India in depth.
The Information Technology Act of 2000 and the developing Foreign Exchange
regulations are among the rules that are examined. Policy on Direct Investment.
Important topics covered in the paper include intellectual property issues, taxation
complexities, consumer protection in the context of e-commerce, and data protection
and privacy. This research offers insights into the future implications of emerging
technologies and the necessity of proactive legal adaptations by closely examining the
current legal landscape and identifying potential gaps and inefficiencies. To create a
strong legal framework, the paper highlights the significance of cooperation between
legislators, corporations, and stakeholders.
Keywords: India, e-commerce, data protection, intellectual property, taxation, legal
aspects, regulatory framework, and consumer protection.
INTRODUCTION E-commerce, or electronic commerce, refers to the buying and
selling of goods and services over the Internet. It encompasses various online business
activities, including online retail,b2b transactions,c2c transactions, subscription
services, marketplace, and mobile commerce. E-commerce has transformed how
businesses operate and consumers shop, providing convenience, a wider selection of
products, and often better prices. It also involves various technologies, including
payment gateways, shopping carts, and inventory management systems, to facilitate
transactions and enhance the shopping experience.
Online shopping, which was coined in 1979 by English tycoon Michael Aldrich, is
a subset of e-commerce, which is defined as the act of selling goods, services, or other
information to customers via an electronic network.
Currently, India's trade expedition strategy heavily relies on the development of
E-commerce. Since 1991, when India's economy began to integrate with the global
economy, the country has undergone significant economic reform. As a result, the
foundation of India's trade and financial regulations is the requirement to permit
international trade over procedural and policy reorganizations.
 The Organization for Economic Cooperation and Development (OECD) defines
"e-commerce" as a new mode of conducting business via networks that use open,
standard-setting, non-proprietary protocols, like the Internet. The FDI Policy defines
"e-commerce" as the exchange of goods and services across digital and electronic
networks, encompassing both tangible and digital products. E-commerce websites
include Amazon, Flipkart, Shopify, Myntra, eBay, Quikr, and Olx, among other online
retailers. Global retail e-commerce might reach $127 trillion by 2023. India has seen a
surge in smartphone and internet usage in recent years. Thanks in large part to the
"Digital India" initiative, there were 895 million internet connections in India as of
June 2023. Approximately 55% of all internet connections were made in
metropolitan areas, and 97% of those connections were wireless. The number of
smartphones worldwide has grown dramatically as well, and by 2025, it is predicted
to reach 1.1 billion. India's digital economy has benefited from this, and by 2030, it is
projected to grow to USD 1 trillion. The quick increase in smartphone use and
internet users, together with growing earnings, have aided in the expansion of India's
e-commerce industry.

Types of E-commerce: E-commerce provides different options to meet the

needs of businesses and customers. Knowing these types is important for investing
in or growing your online presence.
B2C (Business-to-Consumer) is when businesses sell products or services directly
to customers. For example, a customer buys a new smartphone from Amazon.
B2B(Business-to-business)means businesses sell things or services to other
businesses. This model is usually linked to bigger amounts, more complicated deals,
and longer sales processes.
For example, an online shopping site like Amazon purchases a payment service from
a company like Razorpay. Sure Please provide the text you'd like me to simplify.
C2C (Buyer-to-Buyer) C2C e-commerce involves websites or apps that help people
buy and sell things or services directly to each other.
For example, some people sell their used books on eBay.
C2B (Consumer-to-Business) means that individuals sell their products or services
to companies.
For example, websites like Upwork let workers offer their skills to businesses all over
the world.
C2G (Consumer-to-Government) is when people communicate and interact with
government offices. Even though it’s small, it is becoming more important.
For example, we can talk about signing up for taxes or paying for public services
using websites. Sure Please provide the text you'd like me to simplify.
Business-to-administration (B2A) refers to companies that work with government
agencies and other government offices. Companies sell products or services to
public organizations, usually by getting contracts to supply them for a long time.
This model is important in fields like health care, buildings, and public services. Here,
government agencies depend on businesses to provide goods and services that are
fair and open.

Understanding the E-commerce Workflow:

1. Customer Interaction: This initial stage involves customers exploring an online

store or marketplace.

2. Product Choice: In this phase, customers identify their preferred products and add
them to their shopping cart.

3. Payment Process: At this point, customers are required to enter their payment
information and shipping details.

4. Order Management: The business receives the order and initiates the processing.

5. Order Execution: After processing, the order is approved for fulfilment.

6. Customer Updates: Throughout the entire process, customers receive

notifications regarding their order status, shipping updates, and tracking
information.

7. Delivery of Product or Service: The business then sends out the product or
provides the requested service.

8. Invoice Issuance: Following delivery, customers may receive a physical or

electronic invoice that outlines the Goods and Services Tax (GST) rates.
Objective: Online retail performance optimization is the main emphasis of
eCommerce aims. Increasing website traffic, improving customer interaction, raising
conversion rates, and accelerating revenue growth are examples of these objectives.
Optimization of conversion rate (CRO): Make adjustments to your website to
raise the possibility that users will purchase something from you or subscribe to
your newsletter.
Boost traffic: More people visiting your website can result in more sales and more
exposure to your business.
Boost sales: A recurring objective for online retailers, sales are critical to the
prosperity of both your website and the company.
Content marketing: To get leads, and produce interesting and compelling
content.
Social media marketing: Reach a wider audience and introduce your company to
more people.
Cost of acquiring a customer (CAC): Find out how much it costs to purchase
or draw in a client.
Cart abandonment rate: Monitor the number of consumers who leave their carts
unfilled while checking out.
Strengthen your online presence: Boost user experience, boost conversion
rates, and increase website visitors.
Disadvantage: The world of e-commerce has grown at an unprecedented rate
over the past few years. Since the pandemic began, businesses have witnessed the
potential of e-commerce.
While the potential is seemingly unparalleled, it’s not all sunshine and roses. There are
quite a few e-commerce challenges that businesses face in a rapidly changing
economy. If you are running an e-commerce business, you need to be wary of such
challenges as well. The start-up costs of the e-commerce portal are very high. The setup of the
hardware and the software, the training cost of employees, and the constant maintenance and
upkeep are all quite expensive.

● Although it may seem like a sure thing, the e-commerce industry has a high risk of
failure. Many companies riding E-commerce Difficulties Over the past few years,
the e-commerce industry has expanded at a never-before-seen rate. Businesses have
seen the potential of e-commerce since the start of the Internet.
 ● Even if the potential seems limitless, things aren't all sunshine and roses. In an economy
that is changing quickly, firms have a lot of e-commerce issues. These are the kinds of
obstacles that you should be cautious of if you are managing an online store.
● The e-commerce portal has very high start-up costs. The expense of setting up the
technology and software, hiring new staff, and providing ongoing maintenance, and
upkeep are all high.
● The likelihood of failure in the e-commerce industry is quite significant, despite its
apparent certainty. Numerous businesses using the 2000s dot-com boom have crashed
spectacularly. The likelihood of failure is still very high.
● E-commerce might feel impersonal at times. As a result, it lacks the warmth of a human
connection, which is crucial for many products and companies. The absence of a
personalized touch might provide a drawback for various services and goods, such as
jewellery design and home design.
● Another area of worry is security. We have only recently become aware of numerous
security breaches in which client information was pilfered. Identity theft and credit card
theft are still major worries for consumers.
● There are also fulfilment issues. Issues with shipping, delivery, confusion, etc. may arise
even after the order is placed. Customers are dissatisfied as a result, and the dot-com
wave of the 2000s has failed miserably.

Advantage

● Sellers can reach a worldwide audience through e-commerce. The geographical barrier of
place is eliminated. Buyers and sellers can now meet virtually, bypassing geographical
barriers.
● Transaction costs will be significantly reduced by electronic commerce. It gets rid of a lot
of the fixed expenses associated with running physical stores. The businesses can benefit
from a far larger profit margin as a result.
 ● With minimal effort on the side of the client, it offers speedy delivery of items. Also,
issues from customers are promptly resolved. Customers and the business both save time,
work, and energy thanks to it.
● Convenience is also another fantastic benefit. Shoppers are available around the clock.
The website never stops working and has no malfunctions. Working hours like a shop.
● Electronic commerce also allows the customer and the business to be in touch directly,
without any intermediaries. This allows for quick communication and transactions.

Lawful defence in e-commerce

● Personal data is utilized lawfully and appropriately in the digital age thanks to the Data
Protection Act of 2018 and the General Data Protection Regulation (GDPR).
● Protecting consumers against deceptive advertising, faulty goods, and online credit card
handling is the goal of e-commerce regulations. Intellectual property: If e-commerce
companies utilize intellectual property without authorization, corporations can sue them
for damages of millions of dollars.
● Product responsibility is the legal term for businesses that are liable for harm, disease, or
property damage caused by a defective product.
● Contracts: Because of e-signature regulations such as the Uniform Electronic
Transactions Act (UETA) and the Electronic Signature in Global and International
Commerce Act (ESIGN Act), electronic contracts are enforceable in law. Taxation and
adhering to regulations Regulation and taxation standards must be met by e-commerce
enterprises.
● Business license: In a given jurisdiction, a business license is a legally recognized
authorization that permits it to operate.

Historic ruling in India

Future Retail versus Amazon

Issue Whether Amazon has control over Future Retail through its Shareholder Agreement with
Future Coupon.

Whether the sale of FRL to Reliance breached FCPL’s Shareholder Agreement with Amazon.

SC issued an order approving the continuation of the SIAC arbitration. They ordered that Future
Retail's request to end the arbitration on the basis that Amazon's approval to invest in Future
Coupon was cancelled by the Competition Commission of India be heard by SIAC first. This
case illustrates the intricacies of commercial contracts and rivalry, demonstrating how legal
frameworks impact market dynamics.

India's Competition Commission v. Flipkart

According to a Competition Commission of India (CCI) investigation, the two largest online
retailers, Amazon and Flipkart, favoured some vendors on their marketplaces, which constituted
anti-competitive behaviour. According to an Indian antitrust investigation, Flipkart and Amazon
broke competition regulations by giving some vendors special treatment

.This ruling highlights the regulatory obstacles in e-commerce while addressing market
dominance and possible unfair behaviour.

Ashish Bhalla versus Snapdeal This case has established the standards for how
e-commerce platforms handle customer complaints and the importance of transparent product
listings. Since customers can now access just redress mechanisms, online marketplaces are
legally obligated to protect consumer rights. If you need extra information regarding any specific
aspect of the ruling, please don't hesitate to ask.
Government Activities Since 2014, the Government of India has reported different
activities, to be specific Computerized India, Make in India, Start-up India, Ability India, and
Development Support. The convenient and viable usage of such programs will likely back the
development of E-commerce within the nation. A few of the major activities taken by the
Government to advance E-commerce in India are as follows: The Government e-marketplace
(Diamond) platform's Net Stock Esteem (GMV) multiplied in FY24 to cross the Rs. 4 Lakh
Crore(US$ 47.96 billion) stamp, driven by a 205% surge within the acquirement of services,
which accounted for about 50% of the overall GMV.As of Walk 2024, the Pearl entrance served
5.8 million orders worth Rs. 3,87,006 crore (US$ 46.67 billion) with 148,245 essential buyers
and 215,743 auxiliary buyers.On February 4, 2024, CSC and ONDC collaborated to grow
e-commerce reach to country regions in India. This collaboration coordinates CSC's e-Grameen
app with the ONDC organize, giving citizens in rustic India access to tremendous e-commerce
organize, cultivating business openings and driving the vision of Gram Swaraj.On February 14,
2024, the Service of Protection (MoD) reported that acquirement through the Government
e-Market (Pearl) entrance has exceeded Rs. 1 lakh crore (US$ 12.06 billion), with about half of
the exchanges happening within the current financial year. Jewel, propelled in 2016, encourages
online buys for central government services. MoD has executed over 5.47 lakh orders, with
roughly Rs. 45,800 crore (US$ 5.52 billion) granted this monetary year. Strikingly, 50.7% of
orders, totalling Rs. 60,593 crores (US$ 7.31 billion) have been awarded to Small scale and
Little Ventures (MSEs). Jewel has risen as an essential stage for optimizing open investing
within the Resistance segment, with the Service displaying an unfaltering commitment towards
productive obtainment hones.Government e-Marketplace (Diamond) is an internet stage for open
acquirement in India that was propelled on Admirable 9, 2016, by the Service of Commerce and
Industry to make a comprehensive, productive, and straightforward stage for the buyers and
dealers to carry out acquirement exercises reasonably and competitively.In FY23, the obtainment
of products and administrations from the government entry crossed the Rs. 2 lakh crore (US$ 24
billion) stamp.As of November 2022, the Diamond Entrance has served 12.28 million orders
worth Rs. 3,34,933 crore (US$ 40.97 billion) from 5.44 million enlisted dealers and benefit
suppliers for 62,247 buyer organizations.In an offer to systematize the onboarding handle of
retailers on e-commerce stages, the Division for Advancement of Industry, and Internal Trade
(DPIIT) is allegedly arranging to utilize the Open Arrange for Advanced Commerce (ONDC) to
set protocols for cataloguing, merchant revelation and cost disclosure. The division points to
supply rise to openings to all commercial centre players to form ideal utilisation of the
e-commerce environment within the bigger intrigued of the nation and its citizens.National
Retail Approach: The government had distinguished five zones in its proposed national retail
policyâ.ease of doing commerce, legitimization of the permit preparation, digitisation of retail,
centre on changes and an open organize for advanced commerceâ.stating that offline retail and
e-commerce got to be managed in a fundamentally way.The Consumer Assurance (e-commerce)
Rules 2020 informed by the Buyer Issues Service in July coordinated e-commerce companies to
show the nation of roots near the product postings. In expansion, the companies will too need to
uncover parameters that go behind determining item postings on their stages.Government
e-Marketplace (Jewel) signed a Reminder of Understanding (MoU) with the Union Bank of India
to encourage a cashless, paperless, and straightforward instalment framework for a cluster of
administrations in October 2019.Beneath the Computerized India development, the Government
propelled different activities like Umang, Start-up India Entry, Bharat Interface for Cash (BHIM)
etc. to boost digitisation.In October 2020, Serve of Commerce, and Industry, Mr. Piyush Goyal
welcomed start-ups to enlist at the open obtainment entrance, Jewel, and offer products and
administrations to government associations and PSUs.In October 2020, correcting the exact rules
of 2016, the government mandated foreign companies working in e-commerce stages in India to
have lasting account numbers (Skillet). It forced a 2% to assess within the FY21 budget on a lot
of products or conveyance of administrations through a non-resident e-commerce
administrator.In arrange to extend the cooperation of remote players in E-commerce, the Indian
Government climbed the restrain of FDI within the E-commerce commercial centre
demonstrating up to 100% (in B2B models).The heavy investment made by the Government in

rolling out a fibre arrangement for 5G will offer assistance to boost E-commerce in India.
Conclusion: Grant Thornton says that e-commerce in India is likely to be worth $188 billion
by 2025. Thanks to more people using smartphones, the introduction of 4G networks, and
growing incomes, the Indian online shopping market is predicted to grow from $38. 5 billion in
2017 to $200 billion by 2026. After China and the US, India had the third-biggest number of
online shoppers, with 150 million in 2021. This number is expected to grow to 350 million by
2026. Ultimately, the legal aspects of e-commerce in India strike a good mix between progress
and responsibility. A proactive approach balancing the demands of fair competition, innovation,
and consumer protection is necessary to traverse this complex regulatory environment
successfully. To uphold the rule of law, lawmakers, and corporate stakeholders, an environment
that fosters entrepreneurship must be created. Working together, politicians, business
stakeholders, and legal experts may foster an environment that encourages entrepreneurship
while upholding the rule of law. India's legalization of e-commerce is pointing to a promising
future where everyone will have access to the digital market, moral restraints will not hinder
innovation, and consumer confidence will grow.
India's legal e-commerce features represent a fine balance between accountability and
advancement. To effectively navigate this intricate legal landscape, one must adopt a proactive
strategy that balances the needs of fair competition, innovation, and consumer protection. To
create an atmosphere that supports entrepreneurship while maintaining the rule of law,
legislators, and business stakeholders, To create an atmosphere that supports entrepreneurship
while maintaining the rule of law, legislators, business stakeholders, and legal professionals must
work together. The trajectory of e-commerce legalization in India points to a bright future in
which consumers' trust is strengthened, innovation thrives within moral constraints, and the
digital market opens up opportunities. Provisions about IT offences have been added to
previously enacted legislation as a result of the IT Act 2000. The list of other principal Acts that
the IT Act amends is as follows:

Indian Penal Code, 1860: - The Information Technology Act of 2000 amended the
section of the IPC about records and documents by adding the term "Electronic" and
categorizing electronic records and documents in the same category as physical
records and documents."Electronic record" and "information" were all added to the IT
Act to include them in the evidential framework.

Act of 1872 Concerning Indian Evidence: Before the IT Act's passing, all
evidence in court had to be produced in person. The IT Act recognizes all electronic
documents and records. The definitions portion of the Act was amended to include all
documents, including electronic records. The IT Act was amended to include terms such
as "information," "digital signature," "electronic form," and "secure electronic record" in
the evidential process.

Shilpy Shrivastava
NCU, Gurgaon