From UPSC perspective, the following things are important :
Prelims level : Not much
Mains level : Paper 3- Significance of e-commerce sector for India
The article highlights the untapped potential of the e-commerce sector in the transformation of the Indian economy and suggests factors to take into account in the new e-commerce policy.
How pandemic contributed to the growth of e-commerce
- A celebrated McKinsey study has revealed that we have covered a ‘decade in days’ in the adoption of digital during the pandemic.
- Behavioural changes have been witnessed in most areas like work, learning, health, travel, entertainment, etc.
- But the biggest surge has been in e-commerce, both in goods and services.
Significance of the sector for India
- E-commerce is one of India’s fastest-growing sectors, for attracting FDI and creating jobs, and providing a pan-India market for lakhs of SMEs, and facilitating exports.
- India has a vibrant retail sector, bubbling with energy and a bright future.
- E-commerce can rope in lakhs of MSMEs in cross-border trade and multiply turnover and revenues enormously.
- Its role in facilitation of exports with linkages and access to overseas markets can also help inject competitiveness in our products and creating a lot of jobs and market opportunities, adding to inclusive growth.
Issues faced by the sector
- The digital interface during e-commerce processes with multiple agencies has resulted in a plethora of compliances.
- These compliances include Income Tax Act 1961, Information Technology Act 2000, Consumer Protection Act 2019, FEMA Act 2000, Competition Act 2002, Companies Act 2013, Anti-Piracy Law, GSTN, DGFT, etc.
- In addition, handling, generation and protection of humongous data is a major issue under data protection laws.
- At times, there are requirements of compliances with various local and state laws, and during exports, adherence to foreign laws, many of which could be quite complex and rigorous.
E-commerce policy to aid Inclusive growth
- Inclusive growth being an important objective of the proposed e-commerce/FDI policy, it should recognise and support new business models in both product and service segments.
- The policy should be aimed at improving consumer experience and providing gainful employment to regular and gig workers with improved earnings.
- India, in fact, is the first country to extend protections to workers including the new-age gig and platform workers, which is being viewed with interest globally.
- With the passage of the Code on Social Security 2020, policymakers have focused on financial and social security associated with employment to contemporary socio-economic realities.
- The role of platform workers amidst the pandemic has presented a strong case to attribute a more robust responsibility to platform aggregator companies and the State.
- This has cemented their role as public infrastructures who also sustain demand-driven aggregators and e-commerce platforms.
- This role of the platform workers may help in higher productivity and more sustainable employment, when many of them could potentially become mini-entrepreneurs.
- This, however, would need to be facilitated by concerned public and private institutions as also the multiple regulators in the e-commerce ecosystem.
- In an online services market place and to provide full support to regular and gig professionals rendering services on the platform, it must be imperative on the service platform to build their capacity through training, technology and access to high-quality consumables and tools.
Consider the question “Examine the role e-commerce can play in India’s pursuit of inclusive growth? What are the issues faced by the sector in India?”
We are in for exciting times, as we enter this decade, rightly called the ‘Techade’; 2020 has accelerated technology infusion in all segments of life and activity. The world is looking at India with expectations and we owe it to our nation.