Economy

India’s Shabby Treatment of E-Commerce Sector is Slowing its Fight Against COVID-19 

E-commerce infrastructure could have been put to good use to ensure last-mile delivery of essential goods. Instead, states like UP will now attempt to build their own doorstep delivery model.

A crisis is always an unfortunate time for any government. It poses many moral and ethical dilemmas for the choices that the government needs to make while fighting the crisis. Therefore, it rarely comes out of it unscathed for a number of reasons including bad calls, missed chances and patchy implementation of right intent. 

For instance, the moral dilemma that the doctors in Italy are confronting in their fight against the Covid-19 regarding the allocation of the rationed supply of ventilators to younger patients over older patients. However, the dilemma may not have existed if the supply of ventilators would have been enough to cater to both types of patients. This was only possible, if only Italy had, over time, accounted for its aging population and perhaps changed its existing norms while deciding its budget allocations on healthcare and ventilators. 

In a way then will it not be wrong to presume that Government’s disposition to fall in a dilemma is its own making aided by existing biases and its failures to plan with a progressive mind-set.   

India announced a total lockdown of the country a few days ago to implement social-distancing. Experiences from China, Iran, Italy and Russia suggests that social-distancing appears to be the only logical tool currently available at hand to ensure that we somehow manage to dodge the Corona -19 bullet, whatever be the cost rather than to later scramble for ventilators whose availability in India in comparison to that of Italy’s  is hardly worth mention. But in taking such an unprecedented and drastic measure of complete lockdown the ethical dilemma for the government is the total wipe-out of employment for the informal working class — 81% of India’s employed work in the informal economy — whose household budgets run on daily purchase of 100 ml cooking oil and 50 gms of glucose biscuits and who barely make a cut in the social security net.

A crisis is also a time that sadly exposes government’s misplaced priorities of the past and that makes it rudderless while mounting its defences against the crisis. The Indian government’s hot potato policy approach towards e-commerce since its meteoric growth since 2010 gets exposed in its fight against Covid-19 as one such case of mis-placed priorities. 

Since the inception of e-commerce, the Government, for various considerations and notions, has always viewed it more as a threat of some form and evaluated it from an us-versus-outsider framework. E-commerce has rarely succeeded in the government’s books in terms of being appreciated for the tremendous advantages it brings to the streamlining of the supply chain; how it helps create swift movement of essential and non-essential merchandise across the nation. Policy makers still miss the point that in the last decade, high risk private capital has almost exclusively created a network of fulfilment centres, logistics hubs and a last mile delivery system that today is capable of door-step deliveries of many essential items within 24-72 hours in more than 80% of pin codes in India. 

The outcome of such a biased thinking of the government is that it has always emitted confusing signals to the e-commerce industry on taxation, ownerships and competition.  

Let’s assume for an instance that if this was not the case and that the government in the last decade actively worked towards building a thriving e-commerce ecosystem in India and that it appreciated the creation of a vast supply chain and distribution infrastructure capability. 

In that case, the government, while announcing total lockdown in its fight against the Covid-19 pandemic would have been bold enough to claim that the e-commerce infrastructure will be sweated and put to good use to ensure last mile delivery of essential commodities to most Indian households across the country in a timely manner. In that case it would have been more confident to recognize that the temporary job losses in the informal sector will be partially compensated through the creation of other employment avenues  via temporary jobs in the e-commerce industry to manage the sudden and disruptive spike of orders and deliveries across India. The informal labour pool would have then become soldiers like nurses, doctors and policemen in the execution of this perhaps the largest and unique experiment of social distancing in the world. Out-of-work plumbers, factory workers, taxi drivers and many other informal workers would have been absorbed in the supply chain of e-commerce to carry out door-to-door deliveries for this duration.

 In that case the government would have been prudent enough to isolate the value chain of e-commerce and mark it as an essential service just like it has done so for hospitals, kirana stores and medicine shops. It would then have allowed domestic cargo flights to operate and ferry essential goods aided by marked and dedicated trucks to ply on the road for the smooth movement of essential goods. In doing so the government would have been assured that such a system is capable of making the call for social distancing a success sans anxiety for a few and desperation for many. 

But that is indeed not the case. One decade of policy flip-flops has prevented within the government machinery proactive listening posts who can take a dispassionate and objective view towards e-commerce and see it in this light. The result is that while citizens are asked to stay confined in their homes, an e-commerce ecosystem that is well-equiped to aid this call for social distancing has to spend its precious bandwidth either to convince local authorities about the importance of its business continuity (like many hyper local delivery chains and majors like Amazon) in these times or is compelled to halt it altogether (like Flipkart). In the meantime, state governments like that of Uttar Pradesh are attempting to build a door-step delivery model for essentials from scratch by engaging lorries, thelas and rickshaws – an area that is not its core expertise. All that was needed was for e-commerce to be allowed to lead this initiative from the front and who could have gainfully employed an out-of-work informal workforce to manage the scale. 

Instead scores of informal workers who could have been isolated, tested and employed in aiding the government to make social distancing a success are on the edge of their nerves to think about their next meal or to seek an escape route to their villages at the cost of social exposure and tryst with law enforcement. Corona is the last thing on their mind and all of this only for the government’s rigidity to not think about E-commerce with an open mind in the last decade. It is then fair to say dilemmas are man-made and not an act of God. 

It is certain that India will be a different nation on many counts post the 21-days lock-down period. If we come out of it barely bruised or unscathed, we will need to make sure that the choices we will make henceforth should not push us in similar dilemmas in future. A proactive approach to E-commerce is one such wish list. 

Ankur Bisen is SVP, Technopak Advisors; Author of WASTED – a book on India’s sanitation challenge, published by Pan Macmillan India.