Government to modify IT Act to support ecommerce growth

There is no doubt that the ecommerce industry is one of the most potential sectors in business and it’s no secret that everyone wants a piece of the pie. With recent reports about Ratan Tata’s personal investment in Snapdeal, the temperature in the ecommerce space is soaring higher and higher.

A much-needed move, the government is now set to relax the legal hurdles associated with ecommerce transactions. Speculations are rife that the government may modify the Information Technology Act, 2000 to do away with legal obstacles related to ecommerce, in order to boost the fast paced growth of the $2 billion online shopping industry:

• Provide legal recognition for transactions using electronic data interchange and other electronic communication.

• Draft globally acceptable guidelines to increase legal predictability for ecommerce and adopt the United Nations General Assembly’s (UNGA) recommended Model Law on ecommerce (MLEC). For feasible electronic transactions, MLEC provides governments with internationally acceptable rules to remove legal hurdles and increase legal predictability for ecommerce.

• Apart from boosting ecommerce sales, with the modification of IT Act, the government also plans to support its ambitious project of about Rs 35,000 crore, to enable high-speed broadband connectivity for around 2.50 lakh gram panchayats. And this would lead to further growth in the ecommerce sector, according to Telecom Minister Ravi Shankar Prasad.

Can the government really make a difference with the modified IT Act?

A joint report by PwC and Assocham predicts the size of the ecommerce industry to be $10-20 billion by 2017-2020. A Technopark report indicates the current $2.3 billion etailing market to touch $32 billion by 2020. Government help and support in any form would definitely be a booster in increasing sales, especially if the legal hurdles and other such obstacles can be eased out.

But how soon the modification will be done is something we can only wait and watch.