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.

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