India may face pressure to open up ecommerce sector

Source: The Economic Times, Jan 23, 2017

NEW DELHI: India is likely to face pressure from developed countries to open up its ecommerce sector. G-20 has for the first time asked various countries, including India, their views on ecommerce.

In three issue notes circulated to the governments of member countries, the forum has asked for views on enhancing the readiness of countries to engage in digital trade, how the WTO can promote ecommerce and measuring the digital economy.

“The German G-20 presidency aims to develop a conceptual framework for measuring cross-bordere-comm digital trade,” the grouping said. “In addition, the G-20 could explore the applicability of WTO rules for digital trade, including potential limits of and gaps within these rules, and assess its development dimension.”

A commerce ministry official acknowledged that “G-20 has sought comments on digital trade for the first time.” The issue is likely to be taken up at the G-20 meeting this year.

India does not allow foreign investment in business to consumer ecommerce retail. Amazon and foreign investor-funded Flipkart function as marketplaces. Citing lack of international accounting standards and common understanding as challenges in capturing the digital trade in statistics, G-20 noted that the uptake of ecommerce is uneven. It has called for full participation of SMEs in developing countries and less developed economies to benefit from online trade.

Ahead of the WTO’s ministerial conference in Argentina in December, G20 has posed queries on the extent to which the existing WTO framework contributes to promoting ecommerce and the areas where new trade rules are needed, besides lessons that can be learnt from rules being made on ecommerce in various regional trade agreements. “The G20 should assess how the WTO could play off its particular strengths by providing for a substantive outcome for digital trade/ecommerce at the 11th ministerial conference (MC),” the G-20 said in one of the notes.

India’s response will be crucial since it has reservations about ecommerce getting included in the WTO’s agenda. More than 30 delegations, most of which are G-20 members, have asked to explore linkages between digital trade and economic development within the WTO grouping while addressing “digital protectionism.” “This would allow members to identify elements that could possibly be used at the 11th ministerial conference, while others might be deliverables in the longer term,” said the WTO note.

“Ecommerce will be attacked in multiple ways at WTO endorsed by the G-20,” an expert said. “Though there is no negotiating mandate for ecommerce to be discussed at WTO, an early harvest of a few issues is possible at MC 11 and negotiations on the difficult decisions could take place later.”

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