MAIT helps Nepal to draft e-commerce laws

NEW DELHI: Nepal has found a way to look beyond its land-locked situation–e-commerce.

And it is seeking India’s help through MAIT, the apex industry body

representing IT manufacturers, vendors and service providers, to frame laws to

enable the process. "Nepal is in the process of framing its IT policy and

has identified e-commerce as the tool that can catapult the country to economic

growth. So the Federation of Nepali Chamber of Commerce & Industry

approached us to provide inputs based on our experience," says MAIT

director Vinnie Mehta. Nepal’s forex debt stands at $2,500 million and its GDP

is growing at a rate of three per cent per annum. Under the circumstances, the

country is hoping to ride the crest of e-commerce and IT-enabled services for

bringing about the much-needed economic transformation.

Nepal’s urgency to have an IT policy in place is directly related to its

geographical location and the lack of economic growth. Its dismal telecom

infrastructure and lack of any software development or manufacturing base make

government intervention all the more imperative. Consider the statistics: Nepal

has a PC penetration of 4 per 1,000, the same as India. However, while India has

an installed base of 45 lakh, Nepal has only one lakh installed PCs, mostly

concentrated in government offices and private companies. There are 2,500

telephone lines, out of which 70 per cent are working. There are five ISPs,

which have a total subscriber base of 10,000, and the government is the sole

provider of cellular services. However, Nepal seems to have no bandwidth problem

since gateways have long since been privatized and there are four private

gateway operators.

Making a presentation to the committee formulating the IT Policy, MAIT said

that the private sector be allowed to take the lead and innovate. The government

should avoid undue restriction and play the role of a facilitator and even

provide initial financing. There should be minimal regulations and the industry

should be encouraged to adopt self-regulation. Private parties should be an

integral part of the government’s policy formulation. Says Mehta, "The

legal framework should ensure competition, protect intellectual property and

privacy, prevent fraud, foster transparency, support fair and commercial

transaction and facilitate dispute resolution. Whenever necessary, the legal

environment should be simple and predictable based on decentralization and

contractual law rather than a top-down approach."

In ensuring a smooth environment for e-commerce, the government should be

consistent with international taxation, avoid double taxation and tread the

issues related to copyright, patents, and trademark and domain names carefully.

Users are entitled to privacy and data gatherers should inform consumers what

information they are collecting and how it can be used.

MAIT recommended the following framework to be adopted:

• parties should be free to order contractual relationship between
  
  themselves
• rules should be technology neutral and forward looking
• existing rules should be modified and new rules adopted to support
  
  e-commerce
• the process should involve hi-tech commercial sectors as well as business
  
  that have not yet moved online.

However, none of these would be possible in the absence of a sound telecom

infrastructure. Therefore, it is important to encourage private sector

participation in telecom and establish independent regulator for the sector.

Besides, the government and the industry have to collaborate to promote

industry-driven standards in security and key recoverable encryption products to

facilitate the onset of e-commerce.