India- SA and Indonesia want focus on e-commerce developmental aspects

India, SA, Indonesia want focus on e-commerce developmental aspects

Subject: Economy

Section: Indian economy

• Call for discussions on redressing inequitable gains, uneven spread.
• This is for consideration at the 12th Ministerial Conference in Geneva beginning on June 12.
• The submission by the three is also important in the light of attempts made by a group of countries, led by several developed nations, to push a plurilateral agreement (under the so-called joint sector initiative) on framing e-commerce rules.

Joint Initiative on E-commerce

• A group of 71 WTO members agreed at the 11th Ministerial Conference in December 2017 to initiate exploratory work towards future WTO negotiations on trade-related aspects of e-commerce.
• The negotiations are based on members’ textual proposals made available to the whole WTO membership.
• The issues raised in members’ submissions are discussed under six main themes: enabling electronic commerce, openness and electronic commerce, trust and digital trade, cross-cutting issues, telecommunications, and market access.
• Throughout the negotiations, participants have been encouraged by the co-conveners to consider the opportunities and challenges faced by members, including developing and least-developed countries, as well as by small businesses.

India’s take on E-commerce at WTO

• India at the World Trade Organization (WTO) held that it will not join the negotiations to develop trade rules on e-commerce, as India felt these negotiations are against India’s interests.
• Despite protests from major economies like India, 76 mostly developed nations agreed to initiate talks on e-commerce.
• It has raised concerns and anxiety amongst industry and policymakers in India.

Why is India not joining e-commerce negotiations?

• Data is the new oil of the 21st century. Data is the heart of the digital revolution,
• It is the key resource which can make or break a country in the digital era as all digital technologies like Big data analytics, artificial intelligence, IoT, Robotics, etc need data for them to become more efficient and intelligent.
  • The larger the population of a country, the larger will be the amount of data generated, and younger the population the more will be the data generated.
  • India’s 1.3-billion population is bigger than the population of OECD members (36 countries) taken together, with 66% of its population falling in the age group of 15-64 years, which is around 18 percent of the world’s young population.
  • This amounts to huge data being generated every second in India, which is extremely valuable for the developed world for making efficient digital products and services in the future.
  • This is the root cause for the pressure being applied on India to join the plurilateral e-commerce negotiations.
• During the first industrial revolution,the countries which processed oil were developed, not the ones who produced it.
  • Similarly, today countries which process data are/will be developed rather than those generating huge data.
• In this scenario, where data is the new currency of the 21st century, the term ‘e-commerce rules’ is misleading because:
  • The rules that are being negotiated go much beyond e-commerce and encompass all digital rules which are required by the developed world to make sure that they have free access to data of the world in future as well.
  • This accounts for India’s reluctance over the negotiations on e-commerce as India still doesn’t have any comprehensive law on data protection and data ownership nor an e-commerce law, subject to changing dynamics of the digital revolution.
  • India fears that new rules could provide the pretext for unfair mandatory market access to foreign companies. This will hurt the rapidly growing domestic e-commerce sector, which is still developing in India.