E-commerce focus at WTO may limit India’s headroom to regulate sector

With developed nations getting louder on demands for talks on e-commerce, India may have a hard time ignoring the issue at the upcoming ministerial conference this year.

Barely two months after World Trade Organization (WTO) head Roberto Azevedo visited India warning that discussions on e-commerce would move forward no matter who participated, news pouring in from Geneva over the last few days shows growing deliberations on e-commerce among nations.

An international grouping has been formed in this regard, composed of Latin American nations Argentina, Chile, Colombia, Costa Rica, Uruguay, as well as their partners on this issue, Kenya, Mexico, Nigeria, Pakistan, and Sri Lanka.

Named the ‘Friends of ECommerce for Development’, the grouping has initiated panel-level talks on the issue with some nations also mooting the idea of making it part of the formal agenda for the upcoming ministerial conference in Argentina later this year in December.

Participating in the talks, Azevedo had said e-commerce had broad benefits for consumers as well as medium and small enterprises. “Between 2013 and 2015, the value of the global online trade jumped from $16 trillion to $22 trillion,” he added.

Developed nations at WTO have pushed for discussions on proposed global rules on ecommerce for a long time. Over the last couple of weeks, Australia, Switzerland, Norway, and the European Union, among others, have made fresh arguments.

“Such groupings are cropping up fast. Drawing from what our experience had been at the last ministerial conference in Nairobi, it is imperative that India starts building coalitions on the issue as well,” Sachin Chaturvedi, directorgeneral of trade think tank RIS, said.

There are significant business interests involved, with global e-commerce giants looking for an official route to tap the lucrative markets of the developing world, especially India.

New firms were coming up in developing markets like India and Kenya, which would be severely hit by major corporations from advanced economies, Chaturvedi added.

India has said the issue should be taken up only after support from a larger number of nations.

Any WTO legislation on ecommerce, if binding, will hit India’s e-commerce sector, rules for which are not yet finalised. This would also curtail the space available to the government to regulate the market to protect consumer interests, address anticompetitive practices, and prevent market failure, Abhijit Das, head of the Centre for WTO studies had said earlier.

The WTO's brush with the subject had started way back during the second ministerial conference in 1998 whereby it had been decided to put a moratorium on Customs duties imposed on digital transactions. It was also decided to hold discussions on various aspects of e-commerce, but there was no understanding on negotiating rules.

“In 2015, internet penetration in the least-developed and low-income countries was about 12.6 per cent and 9.4 per cent, respectively. Even for low middle-income countries, the figure was well below the global average. These disparities in Internet penetration should make it clear as to who will be the likely beneficiaries of ecommerce rules,” said Biswajit Dhar, a trade expert and a professor at the Jawaharlal Nehru University.