Monday 17 December 2012

Structuring Of Investments In E-Commerce Businesses In India

FDI in wholesale trading and e-commerce sectors of India under consolidated FDI policy of India 2012 was given a major boost by Indian government. Even the parliament of India recently approved FDI in e-commerce sector of India.
The business structuring of e-commerce in India: legal research report by Perry4Law has demarcated the techno legal requirements that every e-commerce entrepreneurs of India must comply with. At present, Indian and international e-commerce players are flouting Indian laws that Indian government is taking very seriously.

Indian e-commerce, FDI regulations and cyber due diligence are interrelated says techno legal experts of India. E-Commerce Laws and Regulations in India and FDI Regulations are two of the most important Regulations governing E-Commerce in India, suggests Praveen Dalal, managing partner of ICT law firm Perry4Law. While Indian E-Commerce players are well aware of FDI Regulations yet E-Commerce Laws of India are still not followed by and large, opines Dalal. 

In fact, Indian government has already referred the cases of Flipkart and Bharti Walmart to the Enforcement Directorate for alleged violation of foreign direct investment (FDI) regulations. Now Indian government has decided to start an investigation against Walmart for possible FDI norms violations and lobbying for greater market access in India.

Surprisingly a majority of Indian and international e-commerce players are not complying with legal issues of online shopping in India. Online shopping and e-commerce in India must be encouraged but at the same time legal and cyber security issues must also be taken seriously. Online payment players and e-commerce stakeholders must keep these aspects in mind while doing business in India. There is no sense in ignoring Indian legal issues of online shopping.

Cyber law due diligence in India is another area that e-commerce and online shopping platforms must take care of. Cyber law due diligence for Indian companies is one of the most frequently litigated aspect in India. Lack of cyber law awareness and cyber due diligence awareness is the main reason that many websites and companies have found themselves in the net of Indian laws.

While structuring of investments in e-commerce business in India both national and global financer, investors and private equity players must keep in mind the techno legal requirements of India. In case of doubt they may seek the techno legal services of Perry4Law and similar law firms.