BackIndia should follow non-discriminatory competition policy in e-commerce: World Bank
World Bank said that in India, 100% foreign investment in business-to-business e-commerce is permitted'Even in India, online sales as a percentage of total retail sales were only 1.6%, versus over 15% for China and around 14% globally,' said the report
PremiumCountries in South Asia including India should open their e-commerce markets to cross-border trade without imposing tariffs and follow a non-discriminatory competition policy, allow cross-border payments and harmonise their data privacy laws with international regulations, the World Bank said on Monday.
In a report titled “Unleasing E-commerce for South Asia integration" and released in partnership with Cuts International, the multilateral lending agency said e-commerce in the region is still very small. “Even in India, online sales as a percentage of total retail sales were only 1.6%, versus over 15% for China and around 14% globally. Given that only a small share of firms has access to broadband connections and even fewer transact online, there is enormous room for e-commerce to grow in the region," it added.
According to forecasts by German online portal for statistics Statista, at a projected annual compound growth rate of almost 18%, India will have the fastest growth of any country in retail e-commerce over 2019–23.
The report said firm choice is distorted by existing regulations in South Asia including India. “For example, in countries such as India and Sri Lanka, foreign multi-brand retailers cannot have their own inventory, and international giants like Amazon, Flipkart, and Daraz must operate as pure marketplaces. This may have consequences for market access for small firms with limited digital and logistical skills because it reduces the options available to these small retailers and producers (for example, in their ability to hold inventory and manage liquidity)," it added.
Giving examples of entry barriers, the World Bank said in India, 100% foreign investment in business-to-business e-commerce is permitted; however, the multi-brand B2C segment is subject to many restrictions, including FDI not being permitted in the inventory-based model of e-commerce. “Other, more subtle barriers to entry are onerous licensing and capital requirements, large fees, and burdensome approval processes that target foreign entities," it added.
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