E-commerce can spur intra-South Asia trade: World Bank

News:The World Bank has released a report titled “Unleashing E-Commerce for South Asian Integration”.

Facts:

Key takeaways from the report:

• The report has said that e-commerce can become a driver of growth across South Asia and boost trade among the region’s countries but its potential remains largely untapped.
• The online sales in India as a percentage of total retail sales were only 1.6% when compared to 15% in China and around 14% globally.
• Hence,increasing the use of e-commerce by consumers and firms in South Asia could potentially help boost competition and firm productivity, and encourage diversification of production and exports.

Challenges in E-commerce trade:

• Taxes, trade and barriers in export markets
• Lack of mutual trust in intra-regional trade
• Complicated non-transparent non tariff measures
• Constraints over Services trade 
• Below potential FDI
• Lack of regional value chains.

Recommendations:

• The report has proposed reforms in areas such as payments, delivery, market access regulations, consumer protection and data privacy at the national, regional, and global levels.
• The small and medium enterprises in the region could increase their exports, employment by as much as 30% if the countries removes regulatory and logistical challenges to e-commerce.