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The Indian Government has compiled a new draft policy to regulate its rapidly growing e-commerce sector. It has been stated that the draft aims to “protect domestic firms” and is likely to result in implications for the practices that foreign companies like Facebook operate in their country.

The bold and brave new proposal from New Delhi has been likened a considerable amount to that of China’s method of incubating their developing tech companies into tech giants like; Baidu, Alibaba, and Tencent.

Any foreign company now wishing to operate with India, will now have to ensure they are enrolled and registered as a business entity in India in order to continue selling to India.

Ghats in Varanasi

What does it mean for India?

China achieved this success for their domestic leviathans by ensuring the data centers that store the sensitive and much sought-after demographic data locally within China. The positives for this decision are numerous;

  • Investments – This untapped e-commerce market and rise in Internet Usershas resulted in interest from Amazon and Wal-Mart, receiving $5 billion and $16 billion respectively.
  • Local Job Creation – According to International Labour Organisation (ILO), India will again see its unemployment rate at 3.5 percent in 2018 and 2019, the same which was seen in 2017 and 2016. So, a fervent boost in the technology and data sectors would see a tremendous change in these figures.
  • Control – This draft not only grants full control by implementing a legal and technological framework that will thwart the cross-border flow of data within the country, as well allowing India to gain access to their data stored abroad elsewhere. In the draft it states the following; “India’s data should be used for the country’s development, and Indian citizens should get the economic benefits from the monetization of data”

This demographic data is the 21st-century oil as it yields valuable information on peoples spending behavior, sites they visit and more importantly what kind of marketing people are most likely to respond to. With this data, companies can create bespoke marketing campaigns and services based on their online behavior. With over 200 million active users on Whatsapp alone in India, this data is worth it’s weight in gold.

Most Notably Facebook is the first to actively embark on e-commerce venture, adhering to these proposed regulations. They have been seen actively hiring for blockchain developers, and utilizing their relationship with Paypal by creating their new Stablecoin for their Whatsapp messaging application.

Facebook owns Whatsapp

It is likely we will see more regulations impact the country’s data and technological sectors, particularly since Facebook was found out to be selling users information to the highest bidder, contrary to their terms and conditions.

As a result, if you are to search Facebook in the news, you will likely see the name “Digital Gangsters”, which is now being addressed not only by India but by the UK’s British House of Commons and before that the Australian Competition and Consumer Commission.

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