Need of developing e-commerce emphasised

Kathmandu, November 15

As member states of the World Trade Organisation (WTO) come to the table to conclude the negotiations on multilateral rules of e-commerce rules and bind the rapidly growing e-commerce sector with prudent rules, during the 11th ministerial conference scheduled for December 11 to 14, in the Argentine capital Buenos Aires, least developed countries (LDCs) like Nepal have said that they require relaxation in rules for a few years more to advance their e-commerce sector towards maturity.

There have been differences among the countries regarding regulating e-commerce through multilateral rules. However, regulation on e-commerce will be presented as the prime agenda of the 11th ministerial conference.

Though the share of e-commerce in total global trade is rising and is worth about 12 per cent ($25 trillion) of the global trade, as per a study of the International Trade Centre (ITC), e-commerce is a new phenomenon for Nepal. The government just recently framed guidelines to promote e-commerce, which are yet to be endorsed.

The Ministry of Commerce (MoC) has also assessed its readiness to move towards e-commerce. Nepal is still lagging behind in e-commerce as it has yet to create an enabling environment in which e-commerce can thrive.

“We need support in infrastructure development to boost e-commerce,” said Toya Narayan Gyawali, joint secretary of the MoC. “Nepal and other LDCs share a common view that the developed countries need to assist us in creating an enabling environment before multilateral regulations on e-commerce can be adopted by us.”

The enablers for e-commerce are information technology (IT) related infrastructure and internet penetration in the country is at only around 60 per cent. On the other hand, the country also has to narrow down the digital divide in the country, according to Gyawali.

Likewise, e-payment gateway, access to finance and capacity building of the people in the context of wide digital divide are critical to promote e-commerce. There are domestic e-commerce platforms being run in the country, however, due to the hassles in payment gateway no international e-commerce trading platform has a presence in the country.

The country so far has introduced the Digital Signature Act and Electronic Transaction Act that are critical legal provisions for e-commerce, however, lack of payment gateway has long been an obstruction to promote e-commerce in the country.

The current international consumer payments services require that small merchants must also be able to accept card payments but many of them do not even have business bank accounts let alone acquiring membership of a payment gateway provider, according to traders.

However, the country needs to move forward towards promoting e-commerce platform to boost the country’s exports. “Through e-commerce platforms small and medium enterprises as well as micro entrepreneurs get the opportunity to be connected directly to the buyer and sell their products and services at competitive rates, thus removing the middleman from the equation,” said Ratnakar Adhikari, executive director of the Enhanced Integrated Framework — aid for trade mechanism for LDCs under WTO.

Chairing the session titled ‘Assessing E-trade Readiness in South Asia’ during the ongoing 10th South Asia Economic Summit he laid emphasis that e-commerce could be the panacea for the sluggish export sector for a country like Nepal, where transit transport cost is relatively high due to its landlocked status.

During the event, stakeholders urged for separate regulations for the business-to-business (B2B) and business-to-customer (B2C) e-trade.