Union Budget 2024 | Data privacy issues, online frauds emerge as hurdles to e-commerce growth: Economic Survey

NEW DELHI: Issues related to data privacy and rising number of online frauds have emerged as major hurdles in the growth of e-commerce in India, said the Economic Survey 2023-24 tabled in Parliament on Monday.

Citing third-party data, the study said India's e-commerce industry is expected to exceed $350 billion by 2030 and there is a need to educate users on the safe use of e-commerce platforms.

“The development of e-commerce is constrained by inadequate skills required for online selling, such as catalogue creation. Data privacy issues and rising online fraud are found to be the biggest obstacles to the growth of e-commerce in India. Educating users on the safe use of e-commerce platforms has become essential,” the survey said.

The study stated that the Indian e-commerce market has gained significant momentum over the past few years owing to technological advancements, evolution of new age business models and government initiatives such as Digital India Programme, UPI, One District One Product (ODOP), Open Network for Digital Commerce (ONDC), new Foreign Trade Policy, relaxation in FDI restrictions and Consumer Protection (Electronic Commerce) (Amendment) Rules 2021.

The ministry has identified data privacy and cybersecurity as major concerns in the digitization of domestic services and is calling for the introduction of strong security measures, compliance with privacy regulations, and innovation.

“As services become increasingly digital, data privacy and cybersecurity are becoming major concerns,” the survey said.

The ministry said the government is spearheading data protection laws and cybersecurity policies to protect consumer data and strengthen cybersecurity measures in the hospitality sector.

“Ensuring strong security measures are in place, privacy regulations are adhered to, and innovation in security technologies is fostered to achieve greater confident adoption of technology,” the survey said.

The company said the future of e-commerce is based on enhanced user experience through AI, seamless digital payment methods, innovations such as UPI, and business engineering data analytics for business operations and enhancement.

The study noted that the Indian buyer ecosystem is evolving very rapidly and business models will need to innovate to cater to diverse shopper needs, including service expectations, price sensitivity and language requirements.

“As the shopper base expands into second and third-tier cities, there is a need for local-language platforms. Growing start-ups and innovative social media platforms provide opportunities to test unique business models targeted at specific demographics,” the study said.