Indian Ecommerce industry’s existence has just received another threat; and this time it has come directly from Maharashtra Government.
Last week, leaders of the Swadeshi Jagran Manch (SJM), which is an Economic policy front under RSS, had met Arun Jaitley, Union Finance Minister, and sought a ban on eCommerce portals as they are killing domestic businesses. They had issues with FDI laws as well, and had said, “So we have asked the Finance Minister to ban them by law and plug the loopholes. He has to respond to our demands in his budget,”
We didn’t take this request seriously, until, an endorsement came from none other than Finance Minister of Maharashtra, Mr. Sundir Mungantiwar, when he said yesterday, “It is not because the Swadeshi Jagran Manch has made the demand. Even if congress had made this demand we would have looked into it. However, as a state government, we have asked our officials to look into how we can bring these sites into the ambit of taxation,”
On one hand Maharashtra Govt. understands the importance of technology, and is planning to create their own WhatsApp like messenger for internal use, and on the other hand, they are trying to crush the development and growth of the same technology by banning them.
At a time when PM Modi has left no stone unturned to make Digital India dream a possibility, this statement certainly triggers doubts and apprehensions regarding the whole idea itself.
Tax evasions are something which Indian ecommerce portals are being accused of in the past as well, and heavy fines have been imposed for their errors. But considering that the digital business is relatively new in India, there are no proper laws which govern the transactions happening on the Internet, without a middle man involved. Site like Flipkart and Amazon have already been heavily fined for such lapses, and they are learning fast to comply with Government rules.
Last year, Karnataka Government intervened and asked tax officials to go easy on Amazon sellers, after they were ‘banned’ due to tax related issues.
And then there are cultural and social issues as well, which ecommerce is battling; for instance Telangana is considering ban on selling sexual wellness products in the state, as they can endanger women’s safety.
At a time when foreign investors have openly embraced India’s economic plans and decisions, and FDI is coming in at an unprecedented levels, such statements supporting ban on a new way of doing business is certainly unexpected.
International Monetary Fund (IMF) has stated that India will become World’s fastest growing economy in 2 years, overtaking China. But banning and stopping business growth on the pretext of nationalism will take us nowhere.
Your thought?
eCommerce such an important part of today’s world. Simply put, because the world is moving more and more into the digital realm each and every day. 21-40% of a business’s contributions are a direct result of eCommerce and that number is expected to grow rapidly over the coming years. With the growing impact of the digital community affecting the way business is done, now is the time to start thinking about an eCommerce solution.
[…] Various discussions happening at ministerial level in Maharashtra government gives indications that they may considering a total ban on Ecommerce portals! […]
Not a goog idea to ban ecommerce portals as this is a new way of selling wide range of products at customers convenience
E-commerce has boomed too fast and too furiously which the markets and the existing players (Brick and Mortars) etc are not used to experience, and that is bothering them not letting them think long term rather short term, which most of our policy makers too do, E-commerce definitely need proper alignment starting from definition of the business models to clarity on taxation point but banning can be even a last resort for the Finmin, having said that, as one of the comments say that growth in India is inevitable, true that, technology is changing the whole economics of demand and supply, one needs to adapt to it asap and not crib over the losing battle. Also want the author to contact me if he has any research on net neutrality or heavy spectrum cost in India.
Sudipta Sah ;)
It’s surprising to come across something like this. We’ve had instances in the past where certain individuals, political or celebrity figures have worked hard towards impeding the countries growth, but they have only managed to delay the inevitable; which is India’s profound growth.
I personally don’t see this being seriously actioned; there might be a cry about it, but things should continue the way it is. I am sure Arun Jaitley also understands that E-Commerce is a burgeoning category and the ramifications that such a decision could have on the countries economy. They might look at other measures, but not eradication in the form of a ban. This actually paves way for other businesses to work on measures that could help such offline stores compete with E-Commerce ventures, and it will be exciting to see how things move forward.
Lol on the fact that Telangana thinks that sexual wellness products could be harmful to women
Absolutely Rahul – I am quite sure nothing is going to happen…but the important thing is that they are thinking about doing it is in itself quite rificulous. The central govt should immediately let them know about how important ecommerce is in today’s world!