Will the Union Budget 2014 help Indian e-commerce?

Pooja Vishant | Sep 10, 2020

As is customary, the Union Budget has several positive and negative impacts this year too. But is it going to help e-commerce in any way?

In his Union Budget speech, Finance Minister Arun Jaitley announced that manufacturers will soon be able to sell products on e-commerce platforms without any additional approvals. This would be a welcome, and most looked forward to, news for many players like Amazon who have been waiting to enter the e-commerce scenario in India with their own products.

As per IAMAI, the booming e-commerce industry in India registered a 33% growth last year to touch Rs 63,967 crore. This expansion added to the employment opportunities in the country as well and a 30% hike in employment is expected this year.

However, it is not clear about the percentage of FDI that would be allowed.

How does liberalisation of FDI help e-commerce?

According to PwC India’s Sandeep Ladda, there are many benefits to this announcement-

  • Increased employment opportunities in the country
  • Higher commerce activities
  • Foreign players can enter market which will make way for healthy competition
  • Boost in the sector
  • Growth potential for all constituents in the ecosystem – consumers, government, e-commerce players and retailers.

Before the budget announcement

Before the budget was announced, this is what Sarbvir Singh, CFO, HomeShop18 had to say as he felt that investment in infrastructure is crucial for the overall growth of e-commerce.

“One of the major concerns of the e-commerce industry is of Goods and Services Tax (GST) and Taxation. Introduction of GST, which is already pending with the government, is favorable for the growth of the e-commerce sector as it will rationalize supply chain and create common stocking points, thereby offering better value.

If the government rolls out the GST, it would essentially simplify the tax structure and make India one single common market by eliminating state-specific barriers. It will promote interstate commerce and allow a more efficient supply chain.

An integrated taxation policy will also allow faster movement of goods across the country. The NDA Government has already made a promising start. We expect the momentum to continue in the new fiscal budget and this move would help the e-commerce industry grow significantly.

Also, investment in infrastructure-road, rail, air and ports is crucial for an overall growth of the e-commerce industry. We believe the Government will also take steps to promote investment in supply chain and logistics as that’s the backbone of our industry.

This will ease pressure and allow faster movement of goods across the country. Implementation or speedy completion of the infrastructure projects can ease transportation of goods considerably.

So our only message would be to focus on implementation and simplification.”

About Author

Pooja Vishant

Pooja Vishant

After dwindling with her family business, into travel and hospitality, for more than 3 years, Pooja Vishant found her true love in writing. Happy-go-lucky and cheerful, she loves pink; so pink is the way to go if you want to get into her good books. The Associate Editor keeps track of even a leaf that has moved in the ecommerce world!

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