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E-Commerce and E-Business

Discuss how the Indian Railways is benefitted by implementing CRIS.

12.3 Internet in India

An important question arises here about the willingness of Indian buyers for e-commerce. The
expansion of the Internet and the granting of licenses to private ISPs have put the Indian market on
route to a new phase. The small and medium enterprises along with the bigger ones have been realizing
the potential of the Internet. The technological advancements occurring in all spheres of life have been
the driving factors for the spread of e-commerce in India.
The National Association of Software and Service Companies (NASSCOM) have conducted a survey to
evaluate the e-commerce scenario in India. The survey shows that e-commerce is limited in India
because of the poor number of the Internet users in the country.
The world has undergone a big transformation in the recent years. The Internet has seen a steady
evolution from being a source of instant communication in the early 1990s to a wealthy source of
information and education. This evolution has been motivated by the growing customer expectations
with the support and use of the Internet. With the growing expectations of the customers, newer
segments of the Internet usage have emerged and many potential user segments are still unexplored,
which may emerge in the future.
Few years ago, the Internet access was limited and only few major cities were able to access it. VSNL
and the Department of Telecommunications (DOT) were the only Internet service providers. They
provided an agonizingly inconsistent connectivity with poor bandwidth. There were very few phone
lines to sustain a wider network. The number of connections was as low as 5% and users were
frequently interrupted from the services. Moreover, the rates for this level of service were among the
highest in the world. After many years of government monopoly, by the end of 1998, there were only
150,000 Internet connections in India.
At present, the government monopoly as the only Internet service provider is mostly over. Several small
and large ISPs have set up infrastructure, triggering a price war and an impressive improvement of
service. Users are now estimated at over Rs 50 lakhs, with a growth predicted to reach more than Rs 5
crore in the next five years.

Did you know? According to the NASSCOM survey for the year 1999-2000, the total volume of e-
commerce transactions in India was only 450 crore.
Out of the total volume of Rs 450 crore, about Rs 50 crore was contributed by retail Internet or B2C
transactions and about Rs 400 crore by B2B transactions. Rs 450 crore of e-commerce transactions may
seem to be insignificant but, taking into consideration the situation in India, this amount seems
extraordinary in the background of an almost non-existing regulatory framework to support e-
commerce. Thus, if e-commerce based businesses can materialize as viable business propositions, India
can emerge as the most potential country in e-commerce business. A legal regulatory structure has
come into existence with the passing of the Information Technology (IT) Bill in both the Houses of
Parliament.
According to the NASSCOM survey, e-commerce in India will witness a significant jump over the next
few years, considering the increasing interest of the government in the growth of e-commerce market.
Based on the preliminary findings, experts have concluded that the diffusion of the Internet and e-
commerce transactions in India will increase by many folds.

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