Cabinet approves much awaited e-commerce policy

Federal Cabinet has finally approved Pakistan’s first-ever e-commerce policy framework, which took more than three years to finalize the proposal.

Abdul Razak Dawood, Commerce adviser to Prime Minister Imran Khan took over twitter to announce the big news for the country’s economy.

On this big development, Prime Minister Imran Khan said that e-commerce will escalate the effectiveness of Pakistan’s Kamyab Jawan Prog­ramme and One-Woman, One-Bank Account initiative while proving to be the main player of youth empowerment and employment generation through digital connectivity.

In Pakistan, the e-commerce industry surged from Rs20.7bn in 2017 to 93.7 percent to Rs40.1 billion last year. These values do not include the cash-on-delivery transactions, that account for 60 percent of all the e-retail transactions. According to the report number of online merchants has crossed 1,242.

Pakistan has the potential of becoming a big e-commerce market. In the region, India and China are ahead of Pakistan while standing at $33bn and $1526bn, respectively. E-commerce is a future for the economic growth of developing countries, on the other hand, e-commerce sales in developed countries are very high.

The policy is mainly focusing on shifting the cash-on-delivery (CoD) payment method to digital payments from September 2022 for payments of more than Rs10,000. The final target is converting CoD payments to digital payments within 10 years period.

To make the digital payment system more efficient and user-friendly, it is recommended that the Ministry of Information Technology along with the State Bank of Pakistan (SBP) will contact PayPal and other online payment services to ensure the availability of several international payment gateways in Pakistan.

An official of the Commerce Division said “that the framework will mostly empower the women entrepreneurs and encourage micro, small and medium enterprises to play their role in Pakistan’s economy and prosperity. It will also be a tool for export enhancement through e-commerce platforms.”

Furthermore, “it will serve as a breeding ground for an e-commerce ecosystem, responsive to consumers’ interests, including dispute resolution. Lastly, it will be a harbinger of transparency and accountability in the digital industry.”

The framework addresses the following Key aspects concerning e-commerce,

  1. E-commerce regulatory environment
  2. Financial inclusion and digitization
  3. SME and Youth Empowerment through E-Commerce
  4. Consumer protection in the digital environment
  5. Taxation on e-commerce activity
  6. ICT infrastructure
  7. Logistics for e-commerce retailers and marketplaces
  8. Data sovereignty and localization
  9. Global connectivity and Multilateral Negotiations