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NASSCOM: E-C Ttransactions in India to Hit $2.32 Billion by 2002

According to Dewang Mehta, president of NASSCOM (National Association of Software and Service Companies), e-commerce transactions in India will approach the $2.3 billion mark in the next three years.

Mehta added that the figure is based on the assumption that the government will refrain from its proposed plan of imposing additional taxes on such transactions.

NASSCOM has urged the government to announce a three-year moratorium on imposition of any additional taxes on e-commerce transactions in the country, asking the government to take a cue from US President Bill Clinton, who recently announced a three-year tax moratorium on US e-commerce transactions.

"The government should consider e-commerce as a major opportunity for the software industry," said Mehta. "Its contribution to annual software exports from the country would be 30 per cent by 2002, when volume is expected to cross the $10 billion mark."

In 1999-2000, exports are expected to approach $3.9 billion, he added. Mehta said that he felt that e-commerce is not just a Western concept.

"The most talked-about and well endorsed feature of e-commerce is its global flavor," declared Mehta. He said that India's e-commerce solutions are becoming a sought-after commodity around the world, with e-commerce based businesses promoting technology competitiveness, viable business models and entrepreneurship.

Mehta explained that e-commerce transactions have not gained importance due to lack of cyber laws, which would ensure security in such transactions. According to a NASSCOM study, e-commerce transactions in the country are envisioned to reach $581 million in 2000-01 in the wake of the anticipated enaction of the Cyber Laws Bill in mid-2000.

Business to business transactions are estimated to reach $93 million in 1999-2000, while business-to-consumer e-commerce transactions are pegged at $14 million. Internet connections through cable and phone lines, combined with laws providing identity and security to transactions and lowering of telecom tariffs, would act as the drivers of the next phase of e-commerce growth, said Mehta.

"The actual numbers of users who have ready access to Internet in India are almost 1.5 million [as of September 30]. A NASSCOM survey indicates that there is a pending demand of more than 600,000 Internet connections as on 30 September 1999 in the 41 cities surveyed. The survey indicates at least 2 million Internet subscribers (or 6 million users) by end of year 2001, provided private ISPs are allowed international gateways," said Mehta.

However, NASSCOM's survey also indicates that 82% of India's corporate web sites are located in the USA rather than India. A majority of respondents expect the real growth of Internet in India to take place through cable TV, rather than from PCs alone. As of March 1999, India has 37 million cable connections but only 3.2 million PCs.