Indian Govt. to standardize eCommerce Definition


What is eCommerce? The Indian government is soon going to standardize the answer. With the vision of addressing key issues like taxation, FDI and more, the govt. is in the process of binding a proper definition together.

We’ve all heard about the standard explanation of eCommerce. One would say that the Electronic Commerce is the process of buying and selling of products or services over the internet. However, being such a vast field and a burgeoning spectrum, the standard definition can come across several loopholes. The government is looking to eradicate these loopholes to make the process of eCommerce working and transactions even more transparent. Commerce and Industry Minister Nirmala Sitharaman mentioned that her ministry has received inputs from almost all the states on issues related to FDI in the eCommerce segment. India is one of the most lucrative and fastest growing markets in the world. Global brands are now looking to tap the potential of this huge market. The surging internet penetration and the boom in the smartphone sector has only added more fuel to the profitable fire in the segment. The future for the eCommerce segment is looking brighter than ever. India is rapidly adapting to the new way to shop. Sitharaman said her ministry is in discussion with finance counterpart over the taxation issues. In the absence of detailed guidelines, tax disputes have cropped up between e-retailers and some states. The B2B eCommerce segment has 100 percent FDI provisions. However, the retail segment is still devoid of it. With global giants looking to penetrate the Indian markets, the need to address the FDI issue is picking up pace.

Sitharaman was asked if the states are favoring FDI? In a statement to PTI, Sitharaman told, “Let’s see. We will at least come out with some definition of what e-commerce is. We have got the inputs from the states. We are in the process of putting it all together.” The ministry officials indicated that there would be a detailed clarification in place. The brick and mortar shops have been voicing their displeasure towards the domestic e-retail players. PayU Money Head, Channel Partnerships told PTI, “There is no clear definition as of now. It is creating confusion among new start-ups. The government should come up with a detailed definition.”


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“Thinking Aloud” reflects the emerging trends and varied outlook of the rapidly evolving internet and communication sector. An IAMAI publication, this is a part of the market education initiative of the association.

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