The Indian e-commerce sector is one of the fastest growing in the world. In 2015, it is estimated to have been worth US$14 billion, and is expected to grow to US$60 billion by 2026. The sector is driven by several factors, including the increasing penetration of the internet and mobile phones, the growing middle class, and the increasing preference for online shopping. The government has also been supportive of the sector, and has taken several measures to promote it, including setting up a dedicated e-commerce policy committee, and providing tax incentives for e-commerce companies. In the last two roundtables (virtual) we discussed on India's e-commerce regulations around Foreign Direct Investment (FDI) and business models. 

However, the country’s e-commerce sector is not without its challenges. One of the biggest issues facing the industry is data and search bias. Data bias refers to the way in which e-commerce companies collect, store, and use data. This can often lead to unfair outcomes for consumers, as well as businesses. Search bias, on the other hand, is the way in which e-commerce companies manipulate search results to favor certain products or brands. This can often lead to consumers being presented with a biased selection of products, which may not be in their best interests. 

The e-commerce platforms and sellers are facing some challenges with regards to taxation and competition regulations. Currently, the sector is taxed at two different rates, depending on whether the transaction is classified as goods or services. E-commerce companies have to deduct TDS @1% on the gross amount of such sales or services or both at the time of credit of the amount of sale of goods, services, or both which becomes an additional challenge for these firms. Further in March 2016, the finance ministry released a draft proposal for an equalization levy of 6% on cross-border e-commerce transactions. The purpose of this levy is to ensure that all e-commerce companies operating in India, regardless of their country of origin, are subject to the same tax regime. This would level the playing field between domestic and foreign e-commerce companies and generate additional revenue for the government.  The proposal was met with mixed reactions from the industry. While some supported the move as it would create a level playing field, others were concerned that it would make India an unfavorable destination for e-commerce companies and hurt the growth of the sector. The other issue facing the sector is that of competition regulations. Currently, there are no specific regulations for the e-commerce sector in India.  

These regulations and challenges are unique to the Indian e-commerce ecosystem which requires thorough discussion with the various stakeholders and practitioners to come up with robust policy recommendations.