Government May Modify IT Act to Remove Legal Hurdles in E-Commerce

New Delhi: The government is likely to modify the Information Technology Act, 2000 to remove legal obstacles in e-commerce transactions as it seeks to further boost the rapidly expanding over $2-billion online shopping market in the country.

Under the proposed Communications Convergence Bill, the government plans to modify the IT Act, 2000 to provide legal recognition for transactions carried out using electronic data interchange and other means of electronic communication, sources said.

Besides, it also aims to draft a set of globally acceptable guidelines to increase the legal predictability for electronic commerce (e-commerce) and adopt the United Nations General Assembly's (UNGA) recommended Model Law on Electronic Commerce (MLFC), they added.

According to UN Commission on International Trade Law, MLEC seeks to enable and facilitate transactions done using electronic means by providing governments with internationally acceptable rules aimed at removing legal obstacles and increasing legal predictability for e-commerce.

The law is intended to "overcome obstacles arising from statutory provisions that may not be varied contractually by providing equal treatment to paper-based and electronic information".

"Such equal treatment is essential for enabling the use of paperless communication, thus fostering efficiency in international trade," the UN body said.

The government has already constituted a committee to develop a conceptual framework for the Communications Convergence Bill, which was originally drafted in 2000 under the BJP-led NDA government.

The Bill was at that time shelved due to differences between the Telecom Ministry and the Ministry of Information & Broadcasting on bringing the broadcasting sector under the ambit of a super-regulator.

The Department of Telecom (DoT) is likely to finalise the draft Bill before the winter session of Parliament.

The government's move to modify the IT Act, 2000 to boost online shopping also gels with its ambitious project worth around Rs 35,000 crore that aims to provide high-speed broadband connectivity to 2.50 lakh gram panchayats in India.

According to Telecom Minister Ravi Shankar Prasad, the National Optical Fibre Network will lead to an explosion of e-commerce in the country.

A joint study by consultancy firm PwC and industry body Assocham predicts that the size of the e-retail industry is poised to touch $10-20 billion by 2017-2020 and e-commerce firms are expected to spend up to $1.9 billion by 2017-2020 on infrastructure, logistics and warehousing.

Another report by consulting firm Technopak pegs the $2.3 billion e-tailing market to reach $32 billion by 2020.