Abstract
Noting the rising trend in global electronic commerce and foreseeing the vast future potential, the Geneva Ministerial Meeting (1998) of the World Trade Organisation (WTO) first initiated discussion on this aspect. The subsequent negotiations led to a moratorium on custom duties on electronic transmissions, on temporary but regularly extendable basis, with tremendous trade and development consequences. While the cross-border trade flows through E-commerce route have increased significantly over the last couple of years positively benefiting the developed and high-income developing countries on the one hand, the flow of duty-free imports have challenged the industrialisation initiatives of the middle-income developing countries and less developed countries (LDCs), digitally and otherwise, on the other. It has been noted that the tariff revenue loss from the import duty moratorium on E-commerce has been severe for several developing countries, namely—Mexico ($1.9 billion), Thailand ($1.7 billion), Nigeria ($580 million), India ($497 million) and China ($493 million) (Banga, 2019). The loss of revenue in the short run, and the possible loss of industrial space, digital and otherwise in long run, have forced the developing countries to call for initiatives to preserve their policy and regulatory space at the WTO negotiations (World Trade Organisation, 2019). These concerns got reflected in India’s draft National E-commerce Policy (February 2019), prepared in continuation of the strategic initiatives such as ‘Make in India’, ‘Digital India’, ‘Skill India’, and so on (Nair, 2020).
The importance of E-commerce and the policy debate surrounding the same in India is going to remain vibrant for two reasons. First, the E-commerce transactions have deepened in the country in the last six months, given the post COVID-19 reality and the associated enhanced awareness on social distancing. It is likely that the inclination towards platform-based purchasing behaviour would continue. Second, the country has launched the ‘Atmanirbhar Bharat Abhiyan’ in May 2020, with the objective of promoting industrial growth. Enhancing domestic value-addition has been one of the key objectives therein. Possible conflicts between maturing of these recent strategic initiatives and growth in imports through E-commerce route might lead to a policy dilemma. It is therefore crucial for Indian policymakers and negotiators to understand the implications of the related domestic opportunities and regulatory and operational challenges for devising appropriate institutional response. The volume edited by Gupta, an attempt to analyse the E-commerce scenario in India from multiple perspectives, is therefore a timely contribution to the existing literature. The book has 14 chapters including the introductory and concluding ones.
The chapters in the volume provide interesting insights to the ongoing debate. The introductory chapter by Gupta underlines the growing importance and set the context. Discussing the regulatory framework guiding E-commerce under Indian authorities, Gupta point the need for enacting dedicated laws covering various types of activities and the alternate dispute resolution (ADR) mechanism. The empirical analysis by Aggarwal and Jain underlines the crucial influence of the E-commerce related activities on growth and discuss the performance and practices in other leading markets including China, UK and USA. While indicating the potential opportunities for the Indian micro, small and medium enterprises (SMEs) in this platform-based business model and possible expansion of the transactions in the rural belt, the book also documents the potential concerns, given the proportional dominance of foreign players in the domestic market. In particular, if a handful of the leading players exploit their dominant position to restrict entry of the newer firms in the market then the prevailing ‘unhealthy competition’ may rather hurt than help consumers. The cross-country analysis of Hussain and Vats analyse the growth dynamics in major e-platforms as well as their acquisition strategy of local start-ups. The analysis concludes that the developing countries require sufficient policy space to ensure a ‘fair’ market operation. Noting the growing FDI inflows in the country, the empirical analysis of Choudhury and Jadhav attempts to understand the determinants of such inflow. It is observed that the growing mobile and internet penetration as well as the declining cost of mobile data have significantly facilitated the access to E-commerce platforms on the one hand, while the payment flexibilities introduced by the corporates have eased the transactions on the other. Judging the valuation of E-commerce firms in light of their profitability scenario and funding patterns, Garg concludes that optimality is a long run phenomenon, which can be achieved only after gaining a sizable market share. The result indicates towards possible reorganisation within the industry in coming future. As the WTO negotiations on the import duty moratorium are still unfinished, the domestic taxation of the digital economy is still an uncharted territory. Reviewing the E-commerce taxation scenario across countries, Gupta et al. notes the evolving perspective and practices in India (e.g., the equalisation levy on digital platforms without having ‘permanent establishment’ in the country). Analysing the various logistic models adopted by E-commerce firms, Banerjee notes the operational and policy challenges for Indian exporters using the postal, courier and freight routes. Considering the compliance requirements, the analysis underlines the need to involve all the players in the ecosystem for sustained benefit. The analysis of Gupta and Das on the evolving payment landscape in India strongly underlines the role of policy interventions to secure data privacy, data protection and localisation. Referring to the IT Act (2000) and its subsequent amendments and the judicial evidence, Kapoor highlights the need for introducing legal frameworks for preventing cybercrimes to secure sustained growth of E-commerce. Pointing the lop-sided distribution of market share in E-commerce segment, Kumari underlines the need for anti-trust authorities to closely observe but not interfere in the E-commerce segment, unless the violations by lead firms threaten the market efficiency. Acknowledging the immense potential importance of the recent financial technologies like blockchain in facilitating E-commerce, Mishra and Dubey argue how a common consensus across countries at global level can lead to seamless transactions on this front. The concluding chapter by Gupta recounts the regulatory policy dilemma faced by India and the need to cautiously tread on this front by regularly drawing feedbacks from all the stakeholders involved.
As the book provides a very comprehensive coverage of all the policy perspectives involving E-commerce in India, it should be an important point of reference for policymakers, negotiators and researchers alike. While the prime focus of the book has been the Indian market, a chapter on India’s perspectives on E-commerce negotiations at the multilateral forum, in light of the ‘inter-mestic’ considerations, would have been interesting.