‘Decision on fishing subsidies certain in WTO’s Dec. meet’

‘Decision on fishing subsidies certain in WTO’s Dec. meet’

Context

• An agreement on elimination of ‘harmful’ fisheries subsidies is likely to be the only major outcome at the forthcoming meeting of the World Trade Organisation’s (WTO) highest decision-making body called the ‘Ministerial Conference’ and there seems to have no progress at e-commerce.

What is the issue?

• In May, a UN statement cited fisheries experts from UNCTAD mentioned that Harmful fishing subsidies (globally) that contribute to overfishing are estimated to be as high as $35 billion.
• Seeking permanent solution to the issue of public stock-holding for food security purposes’ would be a part of the outcomes as it is an issue of huge importance to developing countries including India.
• India has rejected fresh efforts by a clutch of countries led by the European Union (EU), Japan, Canada and Australia to negotiate new global e-commerce rules under the aegis of the World Trade Organization (WTO).

‘No’ to e-commerce talks

• The probability of introduction of “new issues” like ‘e-commerce’, ‘trade facilitation in services’ and ‘investment facilitation’ into the WTO’s ongoing Doha Round negotiations remains timid.
• The main argument of many developing countries currently remains that there is a lot of stuff on the deck already, which needs to be sorted out before going into new issues like e-commerce.
• Developing countries are not ready to allow e-commerce to be negotiated at the WTO at this stage. They want to ensure that e-commerce is an enabler for development, without going into rule-making at the WTO.

Why did India say no?

• India fears that the new global e-commerce rules could provide unfair market access to foreign online retail firms, hurting the rapidly growing domestic start-ups.
• During an informal meeting at the WTO, the EU, Canada, Australia, Chile, Korea, Norway and Paraguay, among other countries, circulated a restricted draft ministerial decision to establish “a working party” at the upcoming WTO ministerial meeting in Buenos Aires and authorizing it to “conduct preparations for and carry out negotiations on trade-related aspects of electronic commerce on the basis of proposal by Members”.
• A key demand by the developed countries is to make permanent the current ban on customs duties on global electronic transactions—they were suspended in 1998.

What is E-Commerce?

• Electronic commerce or e-commerce is a type of business model, or segment of a larger business model, that enables a firm or individual to conduct business over an electronic network, mainly from the internet.
• Electronic commerce operates in all four of the major market segments: business to business, business to consumer, consumer to consumer and consumer to business.
• E-Commerce processes are conducted using applications, such as email, fax, online catalogues and shopping carts, electronic data interchange (EDI), file transfer protocol and web services and e-newsletters to subscribers.
• Electronic commerce emerged in the early 1990’s and its use has increased at a rapid rate. Today the majority of companies have an online presence.

Types of e-commerce:

• There are several types of electronic commerce. The most common is business to consumer, in which a business sells products or services directly to consumers over the Internet.
• Another type of electronic commerce is business to business, where companies sell products or services to other companies over the Internet.
• Consumer to business electronic commerce involves consumers selling products or services to businesses.
• There is consumer to consumer e-commerce, which is where consumers sell their products to other consumers.

The issues and problems affecting the development of Internet, e-commerce and e-business applications:

• There is no guarantee of product quality.
• Mechanical failures can cause unpredictable effects on the total processes.
• As there is minimum chance of direct customer to company interactions, customer loyalty is always on a check.
• There are many hackers who look for opportunities, and thus an e-commerce site, service, payment gateways; all are always prone to attack.
• E-commerce is lack of human interaction for customers, especially who prefer face-to-face consumption.

Challenges e-commerce business facing in India:

India, the second most populous country in the world, is home to 1.2 billion people. Despite lower per-capita purchasing power, this still makes India one of the most attractive emerging markets for ecommerce. But India is far from being a bed of roses.

Here are some challenges that ecommerce businesses face in India:

• Indian customers return much of the merchandise they purchase online.
• Cash on delivery is the preferred payment mode
• Ecommerce companies using Indian payment gateways are losing out on business, as several customers do not reattempt payment after a transaction fails.
• Though the total number of mobile phone users in India is very high, a significant majority still use feature phones, not smart phones. So, for all practical purposes this consumer group is unable to make ecommerce purchases on the move.
• The logistics challenge in India is not just about the lack of standardization in postal addresses. Given the large size of the country, there are thousands of towns that are not easily accessible. Metropolitan cities and other major urban centers have a fairly robust logistics infrastructure.
• Overfunded competitors are driving up cost of customer acquisition.
• The vibrancy in the Indian startup ecosystem over the past couple of years has channeled a lot of investment into the ecommerce sector. The long-term prospects for ecommerce companies are so exciting that some investors are willing to spend irrationally high amounts of money to acquire market share today. Naturally the Indian consumer is spoiled for choice.

Solutions:

• E-commerce readiness: It is essential to fully understand the payment and logistical infrastructure, consumer behaviour, retail opportunity and technological developments.
• Scope of growth: It is also important to look at the internet penetration, demographics of the online buying population.
• Barriers to entry: Players should understand the regulatory environment and connect with solution providers, content distribution networks, and digital agencies.
• Competition: There is also a need to do an in-depth assessment of what competitors are doing, their online strategy and the nature of each offering.

Government initiatives:

• In India, the Information Technology Act 2000 governs the basic applicability of e-commerce.
• The Indian Government’s “Digital India” initiative is also expected to boost the e-commerce industry. The government will deliver service via mobile connectivity and in doing so, is expected to bring the internet and broadband to remote corners of the country.
• The Indian Government is also modernizing Indian Post and aims to develop it as a distribution channel for e-commerce related services. It will improve delivery services and cash transactions in more remote and rural areas, thus increasing the reach of e-commerce players and expanding the potential market.
• An online Consumer Mediation Centre (OCMC) for e-commerce complaints was launched in December 2016 is in the process of being opertaionalized. A mobile app named “Smart Consumer” has also been launched in December 2016.

Information Technology Act, 2000:

• The Information Technology Act, 2000, is an Act of the Indian Parliament. It is the primary law in India dealing with cybercrime and electronic commerce.
• It is based on theUnited Nations Model Law on Electronic Commerce 1996 (UNCITRAL Model) recommended by the General Assembly of United Nations by a resolution dated 30 January 1997.
• An Act to provide legal recognition for transactions carried out by means of electronic data interchange and other means of electronic communication, commonly referred to as “electronic commerce”, which involve the use of alternatives to paper-based methods of communication and storage of information, to facilitate electronic filing of documents with the Government agencies and further to amend the Indian Penal Code, the Indian Evidence Act, 1872, the Bankers’ Books Evidence Act, 1891 and the Reserve Bank of India Act, 1934 and for matters connected therewith or incidental thereto.
• A major amendment was made in 2008. It introduced the Section 66A which penalized sending of “offensive messages”.
• It also introduced the Section 69, which gave authorities the power of “interception or monitoring or decryption of any information through any computer resource”.
• It also introduced penalties for child porn, cyber terrorism, and voyeurism.

Conclusion:

• The E-Commerce industry in India may currently be behind its counterparts in a number of developed countries and even some emerging markets. The Indian e-Commerce industry has access to funds from within the country and international investors. Overall, the e-Commerce sector is maturing and a number of serious players are entering the market.