Indian Govt Clueless About eCommerce; Examines WTO Documents To Figure its Economic Importance

At a time when Internet users is all set to expand to 730 million and the ecommerce market is about to touch $34 billion mark, thereby giving offline retail some serious competition; Indian Govt. is still clueless about the niche.

But thankfully, they are trying hard to understand this new age digital economics, and efforts are currently on to ‘demystify’ the secret.

As per reports coming in, Commerce Ministry officials are right now examining documents submitted by US Govt. to WTO (World Trade Organization) for a better clarity of the business model generated by Internet.

A senior Commerce Ministry official said: “We are trying to understand the issues relating to it. We are looking at all that. But there is no idea about what e-commerce is. The US has one idea, a developing country has another idea. It is not so straight forward..”

But Why US Version Of Ecommerce?

To be frank, even US doesn’t have much clarity on the issues pertaining to ecommerce based businesses, which have been present in their country since last 45 years, when ARPANET used to arrange marijuana sales between Stanford and MIT.

Right now, US Govt. wants to negotiate with WTO on issues pertaining to trade laws, government regulations, and investment procedures related with ecommerce and digital economy; and for the same they have submitted various documents highlighting their point of views.

US and other developing countries want direct and specific guidelines related to ecommerce from WTO, and this ongoing brainstorming and document sharing is part of the deal.

Hence, by studying US papers on ecommerce, Indian Govt. wants to be on the same page, atleast on ecommerce with other developing countries; and once the issues are clear, then form guidelines and directives for the industry which is almost unregulated as of now (except FDI part).

The official further said, “Now what we are studying is everybody’s interpretation of e-commerce and asking ‘can we come out with a specific definition of this’. “

eCommerce Tussles In India: The Story So Far..

Although nascent, Indian ecommerce has swiftly become one of the fastest growing industry in the whole world; expecting to generate 2 crore jobs yearly.

But due to lack of clarity among Govt. departments, the industry is no doubt suffering.

There is tax issues combined with FDI complexities, which are hindering it’s growth, and news of investigations on ecommerce firms are common now.

Despite several rounds of talks between Govt. and ecommerce firms, DIPP was quite late in recognizing marketplace model and this caused much stress and tension for major ecommerce portals.

Although rules for FDI in ecommerce portals was relaxed last year, new rules pertaining to usage of that FDI is still ambiguous and becomes major reasons for ecommerce portals to worry about.

Last year, Govt. of India finally decided to define Rs 1 lakh crore ecommerce market in India, but clarity and firm decisions are still absent.

Then, there are issues related with illegal trade, which crops up from time to time; issues related with customer complaints and ownership of ecommerce portals in solving them and even robberies and frauds related with online shopping.

It is expected that now, finally, after following US and other developing countries’ footsteps, Indian Govt. may be able to crack the code, and come up with a definitive policy for making ecommerce bigger, stronger and more viable.

We will keep you updated as more details come in.