The Indian Commerce Ministry yesterday sought specific suggestions from the industry to help strengthen e-commerce platforms in the country for enhancing trade and reducing transaction cost.
“Let us come out with very specific agenda as what needs to be done by various ministries…we have a huge potential but we have lot of gaps on legal side, infrastructure side and on the taxation side. We need to address these,” said Joint Secretary in the Commerce Ministry, Sudhanshu Pandey.
According to industry experts, the quantum of transaction cost is 7-10 percent of the total value of Indian exports, which amounts to a significant $15 billion. The Ministry has announced several steps to reduce the cost which include 24×7 customs clearance facility on airports. The official also said that increasing protectionist measures in some economies under the garb of ‘technical barriers to trade’ too is pushing up transaction cost of traders .
These barriers are mainly related with procedures and processes. As per estimates, the market size of Indian e-commerce stands at $3-5 billion and is expected to increase to $80-100 billion by 2020. E-commerce helps in marketing products by MSME sector which do not have the financial muscle to go in for a big advertising blitz.