Online retail sales were only 1.6% of the total retail sales in India and the intra- region online trade remained far below its potential, the World Bank said on Monday.
“While it has grown substantially in recent years, e-commerce in the region is still very small. Even in India, online sales as a percentage of total retail sales were only 1.6%, versus over 15% for China and around 14% globally,” said the World Bank in its report titled, ‘Unleashing E-Commerce for South Asian Integration’.
Indian E-Commerce firms are mostly concentrated in the services sector and often face issues related to uncertain tax laws, legal liability and data protection laws.
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A survey of more than 2,200 firms showed that most of the cross-border E-commerce was carried out with nations such as China, UK and the US, not so much in the South-Asian region.
Some of the popular items traded include consumer durables and fashion accessories such as mobile phones, computer accessories, clothing amongst others.
India outranked its neighbours in the South Asian Region. The report also noted that E-commerce is yet to develop in most of the African nations.
The report also highlighted the issue of denial of market access to foreign multi-brand retail entities by the Government of India and the inequalities faced by the firms currently operating in India.
It specifically pointed out the disadvantages related to logistics and market access faced by the MSME sector in digital trade and called on the government to work towards working on issues which has the potential to revive the economic growth in India.