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Posted 02 May 2024

2 min read

  • Invest India  also highlighted that India will become the 3rd largest online retail market by scale in 2030
    • Invest India is the National Investment Promotion and Facilitation Agency. It is set up as a non-profit venture under the Ministry of Commerce and Industry.
  • Current Status of E-commerce: In 2022, sector was worth $70 billion and makes about 7% of India’s total retail market.

 

  • Key E-commerce models:
    • Inventory Based: In it, Inventory of goods and services is owned by an e-commerce entity and is sold to the consumers directly.
      • FDI is not permitted.
    • Market Based: In it, an e-commerce entity provides an information technology platform to connect buyers and sellers. E.g.  Amazon
      • 100% FDI under automatic route is permitted.

 

  • Key Drivers of E-commerce:
    • Increase in internet penetration (52% as of 2022)
    • Promotion of Digital infrastructure (like eKYC, and Unified Payments Interface)
    • Rise of rural-led Value e-commerce (by 2026 over 60% of e-commerce demand is predicted to come from tier 2-4 towns and rural India).
  • Key Challenges:  Digital divide in many regions, piracy and counterfeit products, domination by foreign entities such as Amazon etc.

 

Key Initiatives to Promote E-commerce

  • Draft e-Commerce Policy: Aims to create a facilitative regulatory environment for growth of e-commerce sector. 
  • Open Network for Digital Commerce: It open source e-commerce network that connects shoppers, platforms, and retailers.
  • Others: Consumer Protection (E-Commerce) Rules, 2020; National Logistics Policy, 2022, India Stack etc.
  • Tags :
  • Invest India
  • E-commerce
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