eCommerce must be treated at par with brick and mortar businesses: IAMAI

As Internet penetration in India is on the rise, the eCommerce sector in the country is likely to witness a growth of over 50 per cent in the next 5 years, says the recently released Economic Survey 2014-15.

The government document, however, raised concerns over consumer safeguards and proposed amendments to the Consumer Protection Act.

“India’s eCommerce market is expected to grow by more than 50 per cent in the next five years,” the Economic Survey 2014-15, tabled in Parliament by Finance Minister Arun Jaitley, said.

Further, the Internet and Mobile Association of India (IAMAI) has supported and welcomed the move by the Department of Industrial Policy and Promotion (DIPP) to support the growth of the eCommerce sector in India.

Concurring with DIPP, IAMAI, in a press note, said that eCommerce must be treated at par with brick and mortar businesses, and there should be minimum interference to help this sector grow. The association contends that the sector should be encouraged to promote innovation and the spirit of entrepreneurship.

IAMAI has pointed out that any plans to regulate the industry will slow down the government’s plan to attract investments as well as to create jobs, which in turn will also impact the economy.

On the hurdles being faced by the sector, the Economic Survey said: “Inventory management, logistics planning and resource availability are important hurdles for online retail in India. Consumer safeguard being another concern for consumers of eCommerce, the government proposes including sufficient provisions in the ongoing amendment to the Consumer Protection Act, 1986.”

The association has said that for millions of small sellers who can neither afford an expensive shop front nor have a brand to sell, online marketplaces have come as a boon by giving them a platform, which has helped them in having a wider market access, as well as the support of a well-known brand. Online Marketplace have helped the retailers with a physical store to sell across the country, thus creating employment opportunities for thousands of educated and uneducated Indians, and also fostering the spirit of entrepreneurship.

Prime Minister Modi, in his address at the Confederation of All India Traders (CAIT) National Convention, said: "We have to accept modern technology. Even a man from a small town looks for branded products these days. But our small traders do not have the resources to take space in malls, hire English-speaking sales people. But can't you set up an online unit? You can create virtual malls in small shops."

eCommerce firms today are at a cross-road due to indirect tax issues, particularly from the State Governments. IAMAI in its pre-budget submission has also requested the Finance Minister to address the anomaly and ensure for the smooth operation of these online marketplaces.