Urgency in Development of E-Commerce in Nepal

During the 11th ministerial conference scheduled for December 11th-14th which is being held in Buenos Aires, Argentina, member states of the World Trade Organization (WTO) will come together to conclude negotiations on multilateral rules of e-commerce and bind the e-commerce sector as a whole with various vigilant rules. However, countries like Nepal, who fall under the least developed countries (LDCs) category, have said that they require relaxation in rules for a few more years to advance their e-commerce sector.

Despite these pleas, regulations on e-commerce will be the prime agenda of the ministerial conference.

According to a new study of the International Trade Centre (ITC), the share of e-commerce is worth about 12 percent ($25 trillion) of the total global trade industry. Despite this however, e-commerce is a new phenomenon in most LDCs like Nepal.

The government has just recently framed guidelines to promote e-commerce in Nepal, but these guidelines are yet to be endorsed. The Ministry of Commerce (MoC) has also voiced its readiness to move towards e-commerce. Nepal is lagging behind significantly in e-commerce as it has yet to create a flourishing environment for the industry.

“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”, he added.

Nepal has, so far, introduced the Digital Signature Act and Electronic Transaction Act which are both critical legal provisions for e-commerce; however, lack of a payment gateway has been proving to be an obstacle that is preventing the promotion of e-commerce in the country.

“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.

Speaking at the session titled “Assessing E-trade Readiness in South Asia” during the ongoing 10th South Asia Economic Summit, Mr. Adhikari emphasized that e-commerce could be the trigger which improves on the export sector for Nepal, a landlocked country where transit transport cost is relatively high.